The Reserve Bank of India (RBI) has clarified that the recent directives issued against Paytm Payments Bank Limited (PPBL) will not affect the functionality or operations of the Paytm app. The RBI Deputy Governor Swaminathan J said that the action is against PPBL, not against the Paytm app, in a press briefing following the Monetary Policy Committee (MPC) meeting on February 8, 2024.
Unaffected by RBI’s order
The RBI had earlier cracked down on PPBL over irregularities in KYC (know your customer) norms, compliance issues, and related party transactions. The intervention stems from concerns about money laundering and questionable transactions involving crores of rupees. Non-KYC-compliant accounts and instances of single PANs used for multiple accounts raised red flags.
However, the RBI Deputy Governor emphasized that the recent actions are directed explicitly towards PPBL and do not impact the Paytm app. He said that the app is not impacted by the RBI’s action, delineating the scope of the RBI’s directive. He also added that the banks’ decision to partner with PPBL is a business decision, indicating the banks’ autonomy in collaborating with PPBL.
Paytm reassures users and merchant partners
This clarification comes as a reassurance to millions of users who rely on Paytm for a wide range of digital payment services. The statement also opens avenues for continued and potential partnerships between PPBL and other banking institutions, ensuring a robust framework for offering innovative financial solutions to customers.
In response to the RBI’s statement, a Paytm spokesperson reassured users and merchant partners that the Paytm app remains fully operational, and their services are unaffected. “Paytm continues to lead in mobile payments innovation, and we are accelerating our partnerships with banks to offer uninterrupted services. We assure our merchant partners that Paytm QR, Soundbox, and card machines will continue to work as always. Our dedication to providing seamless payment solutions and promoting financial inclusion across India remains as strong as ever,” the spokesperson added.
Paytm has maintained that they operate with the highest ethical standards and have not been the subject of an investigation regarding money laundering. The company rejected reports of investigation or violation of foreign exchange rules by the company or its associate PPBL and termed the recent media reports as entirely misleading, baseless, and malicious.
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