Confederation of All India Traders (CAIT) on Sunday advised traders to switch from Paytm to other payment apps for business-related transactions following Reserve Bank of India (RBI) curbs on Paytm wallet and bank operations.<\/p>\n\n\n\n
\u201cThe Reserve Bank of India has imposed certain restrictions, prompting CAIT to recommend that users take proactive measures to protect their funds and ensure uninterrupted financial transactions. Large number of small traders, vendors, hawkers and women are making payments through Paytm and as such RBI restrictions on Paytm could lead financial disruption to these people,\u201d the CAIT said.
The recent restrictions imposed by RBI on Paytm have raised concerns about the security and continuity of financial services provided by the platform, said CAIT secretary general Praveen Khandelwal.<\/p>\n\n\n\n
He urged traders to act promptly and make informed decisions to mitigate any potential adverse effects on their financial operations.
\u201cMoney laundering concerns and questionable dealings of hundreds of crores of rupees between popular wallet Paytm and its lesser-known banking arm had led the RBI to clamp down on tech poster boy Vijay Shekhar Sharma-run entities,\u201d reported PTI citing sources.<\/p>\n\n\n\n
The RBI has ordered Paytm Payments Bank Ltd (PPBL) to suspend most of its business including taking deposits, conducting credit transactions and carrying out top-ups on any customer accounts, prepaid instruments, wallets, and cards for paying road tolls after February 29.<\/p>\n\n\n\n
Paytm wallet customers can use money till the time their balance is exhausted. They cannot add money after February 29.
And in case, RBI does not relent, top-up for Paytm wallet will stop and transactions through it cannot be conducted.
Paytm Payments Bank Limited is an associate of One97 Communications Limited (OCL). One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Vijay Shekhar Sharma has a 51 per cent stake in the bank.<\/p>\n\n\n\n
Confederation of All India Traders (CAIT) on Sunday advised traders to switch from Paytm to other payment apps for business-related transactions following Reserve Bank of India (RBI) curbs on Paytm wallet and bank operations. \u201cThe Reserve Bank of India has imposed certain restrictions, prompting CAIT to recommend that users take proactive measures to protect their […]<\/p>\n","protected":false},"author":4,"featured_media":403228,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[667],"tags":[],"class_list":["post-403219","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/403219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=403219"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/403219\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media\/403228"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=403219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=403219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=403219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
EXPLAINER: Paytm Payments Bank meltdown, its meaning<\/strong>
Son of a schoolteacher from Aligarh district in Uttar Pradesh, Vijay Shekhar Sharma was enamoured by Jack Ma-run Alibaba\u2019s focus on smartphones rather than desktop computers, when he built a digital payments company that would let Indians pay for vegetables, pay utility bills or buy cinema tickets using their mobile phones.<\/p>\n\n\n\n
Sharma, the poster boy of India\u2019s fintech boom, also set out to build an Alipay-like mobile marketplace to go alongside the payments business, allowing businesses to sell goods from matchbox to iPhones online.
With fame came a set of controversies for arguably the most high-profile of a wave of Indian tech entrepreneurs. But none like the one now. The current crisis where the Reserve Bank has ordered Paytm Payments Bank to halt most of its business, is an existential one.<\/p>\n\n\n\n
Here is a breakdown of Paytm Payments Bank crisis:<\/strong>
What was the recent RBI action against Paytm Payments bank all about?
The regulator last week ordered Paytm Payments Bank Ltd, a restricted bank that can take deposits but cannot lend, to not take any further deposits or conduct credit transactions or carry out top-ups on any customers accounts, prepaid instruments, wallets, cards for paying road tolls after February 29.<\/p>\n\n\n\n
Paytm wallet customers can use money till the time their balance is exhausted. They cannot add money after February 29. And in case RBI does not relent, top-up for Paytm wallet will stop and transactions through it would no longer can be carried.<\/p>\n\n\n\n
So what is Paytm Payments Bank, and who owns it?<\/strong>
Paytm Payments Bank Limited (PPBL) is an associate of One97 Communications Limited (OCL). One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Vijay Shekhar Sharma has a 51 per cent stake in the bank.<\/p>\n\n\n\n
PPBL commenced operations as a payments bank with effect from May 23, 2017. Paytm Payments Bank offered digital banking, including savings accounts, current accounts, fixed deposits with partner banks, and balance in wallets, UPI, and FASTag, among other services.<\/p>\n\n\n\n
Paytm Wallet, which comes under PPBL, leads the segment. As per RBI\u2019s provisional data for December 2023, Paytm Wallet users carried out 24.72 crore transactions worth over Rs 8,000 crore for purchase of goods and services while 2.07 crore transactions were carried out for transferring over Rs 5,900 crore.<\/p>\n\n\n\n
What happened and what it means for customers?<\/strong>
The RBI on January 31 directed the Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29. Withdrawal or utilisation of balances by its customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, are to be permitted without any restrictions, up to their available balance.<\/p>\n\n\n\n
Paytm Wallet users can continue to carry on transactions till February 29. However, after February 29, they will be able to use their existing balance till the time it is exhausted but not add any money to their account.
The same rule is applicable on PPBL accounts, Paytm wallet linked services like FASTag, National Common Mobility Card that are used for travel in metro and other public transport.<\/p>\n\n\n\n
What are the alternatives for users?<\/strong>
There are over 20 banks and non-banking entities that offer wallet service. The leading one after PPBL wallet includes Mobikwik, PhonePe, SBI, ICICI Bank, HDFC, Amazon Pay etc.<\/p>\n\n\n\n
Similarly, there are 37 banks comprising all the known public and private sector banks like SBI, HDFC, ICICI, IDFC, Airtel Payments Bank which are authorised to provide FASTag. Customers can recharge FASTag online using their banks mobile banking, internet banking or third party apps like Google Pay, PhonePe etc.<\/p>\n\n\n\n
Why did Paytm Payments Bank come under RBI lens?<\/strong>
The banking regulator had been frequently flagging off issues. According to sources, money laundering concerns and questionable dealings of hundreds of crores of rupees between popular wallet Paytm and its lesser-known banking arm had led Reserve Bank of India to clamp down on Vijay Shekhar Sharma-run entities.<\/p>\n\n\n\n
Sources further said that PPBL had lakhs of non-KYC (Know Your Customer) compliant accounts and in thousands of cases single PANs were used for opening multiple accounts. There were instances of the total value of transactions — running into crores of rupees, much beyond regulatory limits in minimum KYC pre-paid instruments raising money laundering concerns, sources said.<\/p>\n","protected":false},"excerpt":{"rendered":"