New Delhi: RBI Bars Paytm Payments Bank Services

Paytm Wallet, Fastag, and More Affected - What You Need to Know
New Delhi: RBI Bars Paytm Payments Bank Services

NEW DELHI: In a significant development, the Reserve Bank of India (RBI) has imposed restrictions on all services offered by Paytm Payments Bank Limited (PPBL), creating a ripple effect on various financial offerings. Here is a breakdown of how this practice affects users:

1. UPI-based payments not affected for Paytm App users - There is no immediate impact for 70% of Paytm users who rely on the app for United Payments Interface (UPI) transactions. However, users using Paytm Payment Bank accounts for UPI payments will face problems after February .Users whose UPI addresses are linked to other banks should not worry, as their transactions are pending ara is unaffected.

2. Paytm Wallet Services Disrupted Relying on PPBL, Paytm wallet services are set to be disrupted - Users can add money to their wallets until February 29, and can use the money until it runs out. Around 5% of Paytm’s gross merchandise value (GMV) comes from the wallet. Fortunately, users can transfer their wallet funds to any bank account without additional fees.

3. Fastag and Sub-Wallets Impacted - After February 29, credit or top-ups will be prohibited on any customer accounts, including Fastags and other Prepaid Payment Instruments (PPI). This includes NCMCs (National Common Mobility Cards) for urban use as well as food and fuel wallets. Although existing balances can be used, no additional funds can be added at the end of February. Users holding Paytm Fastags are advised to purchase new tags for new designators and activate the existing ones.

4. Stock market and mutual fund operations remain unaffected - Transactions in the stock market and mutual funds fall under the jurisdiction of market regulator Sebi and are not affected by the RBI order.

5. No credit risk to Paytm - Paytm's lending business is not at risk, as credit is facilitated by third-party lenders, not by Paytm itself. Borrowers are expected to continue paying their bills seamlessly.

This regulatory move marks a major improvement in the Indian fintech landscape, with Paytm users encouraged to encourage changes to come it affects the economic sectors. As the situation spreads, users are advised to stay abreast of any new developments.

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Sentinel Assam