Open Payment Gateway : RBI restricts Paytm's banking operations, won't be allowed to accept deposits after March 15

The Reserve Bank of India (RBI) today announced its decision to extend the deadline of some of the operational restrictions imposed on Paytm Payments Bank to 15 March in the public interest.

Paytm Payments Bank is a joint venture under Paytm and India's largest digital bank. The bank was scheduled to cease certain banking operations after 29 February as per earlier regulations. However, RBI today said that Paytm Payments Bank will no longer accept deposits and conduct credit transactions from 15 March. Nonetheless, existing Paytm customers will be able to withdraw funds and utilise the balance in their prepaid cards or wallets without restrictions.

RBI explained that the deadline was extended to give customers more time to make other arrangements.

Towards the end of last month, the RBI revealed that it had found Paytm Payments Bank to be guilty of several regulatory breaches, including transactions exceeding regulatory limits, raising concerns about money laundering. As a result, RBI is considering revoking its licence. The news led to Paytm's market capitalisation falling by $55%.

Earlier, many were hopeful that RBI would soften its stance. However, today's update suggests that the central bank will continue with its restrictive programme.