Paytm Payment Bank to be shut down by RBI order The Reserve Bank of India (RBI) has announced a ban on Paytm Payment Bank. The RBI took such a decision on Wednesday that most of the services of Paytm will be closed on February 29th.
According to the RBI, this decision has been taken because Paytm has repeatedly violated the rules. With this announcement from the RBI, the share of Paytm has seen a huge decline.
The company’s share price fell by 40 percent in two days, Thursday and Friday. On Friday, Paytm shares were trading at 487 baht, the lowest in over a year.
Paytm’s share in India’s digital payment market is 16/17 percent. In this case, millions of people may be affected due to the order of the Reserve Bank.
The statement also mentions that Paytm should provide full facilities to withdraw and use the balances of its customers. “This facility will also be available to customers who have Paytm Savings and Current Accounts or who use FAST Tag,” the central bank of India said.
This means that after February 29th, the customers of Paytm Payment Bank Limited will not be able to use it, and the RBI has also asked Paytm to settle the nodal account by March 15th.
What is Paytm’s response?
One97 Communication, the mother company of Paytm, has said that work is going on for Paytm Payment Bank to comply with RBI instructions. He said, “Being a payments company, One97 works with many banks, not just Paytm Payments Bank. We are speeding up the process and will be fully dependent on our partner banks from the time the ban comes into effect.”
It is mentioned that in the future, One97 will work with other banks instead of Paytm.
What is the Paytm Payment Bank?
There are three types of services under Paytm: Paytm Payment Bank, Paytm Wallet, and UPI. Only a certain amount can be deposited at Paytm Payment Bank. But it cannot give loans.
Similarly, even if a debit card is issued, one has to negotiate with a lender regulator to issue a credit card. In a simple sense, it is a bank account in which money can be kept.
Payments can usually be made to merchants from that. When making payment in this way, the amount is transferred to the merchant’s bank account through Paytm. Based on that, Paytm gives credit points to its customers.
What will be the impact on the customer’s wallet and UPI?
All Paytm services will operate as normal until February 29th. After that, there will be some changes for customers using Paytm Wallet and UPI services. Customers who have money in their Paytm wallet can transfer it elsewhere.
But more money cannot be deposited in the wallet. However, customers who have linked their Paytm account with a third-party bank can use Paytm Wallet and UPI payments.
What is Fasttag?
According to Indian government regulations, FASTag is placed on the front windshield of all cars. Fast Tag is an electronic toll collection system that is operated by the National Highway Authority of India.
The toll fee can be paid through a prepaid wallet at every toll booth. But with the decision of the RBI, it will be possible to use the remaining funds in Paytm’s Fast Tag service from March 1. But no additional amount can be kept in it.
Can businesses there accept payments through Paytm?
Currently, Indian shopkeepers who receive funds in Paytm Payment Bank accounts will not be able to receive payments in the same way. Because it will not be allowed to deposit money in the said account.
But businesses with QR stickers from other companies can take payment.
What will be the impact on India’s fintech market?
Ashneer Grover, the founder of Bharat Pay, responded that this type of action by the RBI will end the fintech sector itself. He has expressed his displeasure through social network X.
He said, “I am not able to understand; clearly, RBI does not want Finte’s business. This kind of activity will destroy this sector. The Finance Ministry, Finance Minister, and Prime Minister need to intervene in this matter.
Paytm’s shareholders and investors are under stress
Since the RBI ordered Paytm, the company’s share price has been falling sharply, which is said to fall further. It is certain that this will affect the shareholders of the company.
There are three parts to Paytm, and when one of them is closed, its impact will be big. But if the company’s most important services, Paytm Wallet and UPI, continue, it will be seen in the coming days whether the share decline will stop or not.
Paytm Payment Bank to be shut down by RBI order 