Paytm Payments Bank deadline: BSE asks investors to enrol with alternate bank before March 15

With the Paytm Payments Bank deadline nearing, the Bombay Stock Exchange (BSE) on March 12 issued an advisory for investors who have exclusively linked their accounts in the bank for stock trading. On January 31 this year, the Reserve Bank of India put business restrictions on Paytm’s banking unit, Paytm Payments Bank, citing major rule breaches. 

Earlier, the central bank had set the deadline for February 29. But later it extended the end date to March 15. 

In a press release on March 12, BSE said: "Investors’ attention is drawn to recent regulatory actions announced by the Reserve Bank of India through its press releases dated January 31, 2024, and February 23, 2024. These actions impose restrictions on Paytm Payments Bank Ltd, including limitations on further deposits, credit transactions, or top-ups to customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., effective March 15, 2024. Exceptions are made for interest, cashbacks, or refunds."

"Investors are hereby informed that these restrictions may impact the securities market transactions of those investors who have registered bank accounts exclusively with Paytm Payments Bank Ltd with their trading members. In light of this, investors are advised to review their current banking arrangements and add additional bank accounts with other banks to avoid any transactional impact due to the aforementioned RBI directive," it added.

The central bank directed Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags, and other instruments from February 29. The regulator reportedly found major irregularities in KYC, which exposed the customers, depositors and wallet holders to serious risks.

Later, it issued a fresh notification where it said the customers can make deposits, credit transactions, prepaid services, wallets, FASTags, and National Common Mobility Cards till March 15, 2024. 

An RBI FAQ page stated that after this new deadline, people will not be able to deposit money into their PPBL account. No credits or deposits other than interest, cashbacks, sweep-in from partner banks or refunds are allowed to be credited. These curbs can affect investors' securities market transactions if they do not have alternative bank accounts.