EPFO has announced that it will block deposits and credits into EPF accounts linked with Paytm Payments Bank following RBI restrictions.
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Effective February 23, 2024, EPFO Field Offices will no longer accept claims associated with Paytm Payment Bank Limited (PPBL) accounts.
Last year, EPFO permitted EPF payments to be made in accounts of Paytm Payment Bank and Airtel Payments Bank. However, the recent RBI curbs on Paytm Payments Bank, issued on January 31, 2024, prohibit any deposit, credit transactions, or top-ups in customer accounts after February 29.
Paytm Payments Bank, operating since May 23, 2017, was licensed by the central bank under Section 22 (1) of the Banking Regulation Act, 1949. The RBI’s decision to restrict Paytm Payments Bank’s operations stemmed from non-compliance issues despite repeated warnings.
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RBI Deputy Governor Swaminathan J emphasised that the action was taken after giving the bank sufficient time to rectify its non-compliance issues.
RBI Governor Shaktikanta Das stated that regulated entities are given ample time to meet regulatory requirements and engage in discussions with the RBI regarding compliance. However, when corrective measures are not taken, the RBI resorts to imposing supervisory or business restrictions.
Regarding Paytm, Das mentioned that an FAQ will be issued based on queries received, and highlighted the expansive network of over 30 million merchants using Paytm services, with approximately 20 per cent relying on Paytm Payments Bank for financial settlements.
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The RBI’s directive on halting new deposits into Paytm Payments Bank has raised concerns about disruptions to digital payments.
