Paytm Payments Bank to Close Down on February 29, Will the Paytm App Work?

RBI has put certain restrictions on Paytm Payments Bank including the bank to close all of its operations by February 29, 2024. In the wake of this news, rumors and misunderstandings about the closure of Paytm’s application are circulating in social media. Amid this news, many customers have also come forward to express their concern about whether the Paytm app will stop operating after February 29.

Thus, the founder of the company Vijay Shekhar Sharma also cleared the air by writing on X that, the RBI’s directives will be effective on the Paytm Payments Bank’s operations and not on Paytm’s application. He assured the customers that the payment application would continue to work, it is only the Paytm Payments Bank that is shutting down.

Vijay Shekhar Sharma added, “To every Paytmer, Your favourite app is working, and will keep working beyond 29 February as usual. I, with every Paytm team member, salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serving our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it.”

The Group Chief Financial Officer and President at Paytm, Madhur Deora also clarified the news earlier. He clarified that Paytm Payments Bank and Paytm application are not a single entity, hence they do not impact each other. He added, “There may be this impression that Paytm and Paytm Payment Bank are one, but by design and by structure, it is not and it cannot be. First, it is an associate company and second is not an associate company in the sense that is some Bank.”

The board of Paytm also mentioned that Paytm Payments Bank, its associate bank is operated purely independently by the latter’s board and management.

Directives By RBI Against Paytm Payments Bank

As per RBI’s directives, once the money and savings of the depositors are safeguarded, the associate bank of Paytm, Paytm Payments Bank’s license will be canceled. Thus, the bank has given February 29 as the deadline for the same. After February 29, 2024, the Payments Bank will not let its existing customers claim money from their popular digital payment wallet or savings accounts. However, the final decision is awaited from the Central Bank of India.

Currently, Paytm Payments Bank has received directives for violating the non-disclosure of material transactions and misuse of customer documentation rules. RBI also mentioned that the majority of Paytm Payments bank accounts lack KYC documents which also raise concerns about money laundering.

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