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The Reserve Bank of India may consider a revision of the February 29 deadline for Paytm Payments Bank, if adequate deposits are not withdrawn from customers, according to two people familiar with the matter.
The regulator has not yet made any final decision on the matter and will only review the need for an extension next week, the people said.
On January 31, the RBI imposed severe trading restrictions on Paytm Payments Bank to restrict new deposits, recharges or credit transactions into customer accounts after February 29. The restrictions were imposed after the regulator noted persistent non-compliance and material supervisory concerns.
But ten days later, the outflow of deposits has been slow as customers still face uncertainty over Paytm’s future. The RBI wants to avoid a situation where several customers cannot access their money after February 29, the people cited above said.
The regulator has directed Paytm Payments Bank to allow transactions from dormant accounts, if the money is transferred to their source bank accounts, the people said. Currently, the RBI is closely monitoring the outflow of deposits to decide the future course of action, they said.
NDTV Profit earlier reported that RBI found material breaches of know-your-customer norms, where multiple accounts were linked to the same permanent account number, stoking fears of money laundering. Some of these accounts were used to carry out transactions worth millions of rupees. There were several inactive accounts, which could have been used as mule accounts.
The RBI also found that Paytm Payments Bank and its parent Paytm had merged financial and non-financial systems, without maintaining an arm’s length distance.