The Reserve Bank of India (RBI) has issued a notification regarding the ban on accepting deposits or top-ups to the Paytm Payments Bank and linked services due to “persistent non-compliance and continued material supervisory concerns in the bank” under Section 35A of the Banking Regulation Act, 1949, which is said to affect millions of users.
On top of this, the RBI has also banned Paytm Payments Bank from onboarding new users from February 29, 2024.
Since this announcement, Paytm stocks nosedived 20 per cent and hit the lower circuit limit on February 1. This ban on Paytm Payments Bank will affect users who are currently using Paytm-linked services like wallets, FASTags, NCMC (National Common Mobility Card) cards, and more.
So what happens to my money in Paytm Payments Bank?
If you are a Paytm Payments Bank customer with money in your account, you can easily transfer it to another bank account through options like UPI (Unified Payments Interface), IMPS (Immediate Payment Service), or RTGS (Real-time Gross Settlement). However, you won’t be able to add money to your Paytm account.
If you have money on Paytm Wallet, then, you can also transfer to a bank account. However, there is a limit of Rs 25,000 per transaction, and one can only transfer up to Rs 1,00,000 a day from Paytm Wallet to a bank account. Also, note that this will attract a transaction fee of 3 per cent while sending money to other bank accounts. Hence, if you are transferring rs 25,000, you have to pay a Rs 750 transaction fee.
Can I still use the Paytm wallet after February 29?
Yes, as of now, there are no restrictions on transferring money from a Paytm Payments Bank or Paytm Wallet to another account, and you can continue to use the service even after February 29. However, you won’t be able to credit an additional amount to your Paytm Wallet. Paytm has also officially stated that it will soon move services like Paytm Wallet, FASTags, and NCMC accounts to other banks.
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