Kolkata: The license for Paytm Payments Bank has been revoked by RBI. Following the decision by the central bank, millions of Paytm are asking whether the money in the bank is safe and secure. There is no cause for panic, RBI has said. The RBI has clarified that the bank has sufficient funds to return all the money belonging to all the customers. What’s equally important is that all the Paytm services such as UPI, Wallet and payment systems will continue to function as usual. The RBI decision was taken to punish the company authorities for non-compliance with regulatory norms and essential services for the common user will continue without disruption. Paytm Payments Bank is a digital-only service which requires maintenance of no minimum balance. It is integrated into the Paytm app and facilitates easy savings. The RBI decision means that it can not accept fresh deposits.
RBI’s position
The Reserve Bank of India has stated that Paytm Payments Bank failed to comply with regulatory guidelines which is non-negotiable. Consequently, the bank’s license has been revoked. The RBI has explicitly assured the public that customers’ funds remain completely safe. The bank holds adequate reserves to refund the deposits of all its account holders. The licence for Paytm Payments Bank was revoked from the close of business hours on Friday, April 24. RBI stated that Paytm Payments Bank has enough liquidity to repay its entire deposit liability.
“The general character of the management of the bank is prejudicial to the interest of depositors as also the public interest… no useful purpose or public interest would be served by allowing the bank to continue…,” RBI said in a statement.
What Paytm stated
One 97 Communications, which owns the Paytm services, stated that it has no direct affiliation with Paytm Payments Bank. The investment already made in it has been written off. One 97 Communications also said its key services will continue to operate uninterrupted even after its associate entity Paytm Payments Bank is deactivated by the RBI. The company also affirmed that Paytm Gold and Paytm Money remains unaffected by the RBI decision and will continue operations as usual.
It must be noted that Paytm Payments Bank has come under regulatory glare earlier too. In 2022, RBI imposed a ban on onboarding new customers.