Following the recent strict measures taken by the Reserve Bank of India (RBI) against Paytm Payments Bank Limited (PPBL), concerns have risen among both investors and Paytm customers about the fate of funds in their wallets.
RBI has prohibited PPBL from accepting deposits or top-ups in any customer account, prepaid instrument, wallet, and Fastag after February 29, 2024.
The company’s shares have witnessed a significant decline of approximately 36 percent in just two days.
Reassuring Message to Customers
To address customer concerns, Paytm has sent out a reassuring message, emphasizing that their money is secure.
The company stated,
“After February 29, you will not be able to deposit money in Paytm Payments Bank account/wallet. However, you will be able to withdraw the money that is in your balance even after February 29.
The restrictions of the Reserve Bank will not have any effect on your existing balance, and your money is completely safe with Paytm Payments Bank. For any help, you can contact us 24×7. Thank you.”
RBI’s Directive and Withdrawal Assurance
RBI’s directive clearly states,
“No deposit or credit transaction or top-up will be allowed in any customer account, prepaid medium, wallet, Fastag, NCMC card, etc. after February 29, 2024. However, any interest, cashback, or refund can be credited at any time.”
Furthermore, customers of Paytm Payments Bank will have the liberty to withdraw or utilize the balance from their accounts,
including savings bank accounts, current accounts, prepaid mediums, Fastag, and National Common Mobility Card (NCMC), without any restrictions.
Paytm and Paytm Payments Bank Distinction
Madhur Deora, President and Group CFO of Paytm, emphasized the distinction between Paytm and Paytm Payments Bank.
He clarified that while there may be a perception that they are the same entity, structurally and in design, they operate independently.
Paytm Payments Bank adheres to banking governance,
maintaining an independent management team that reports to the board.
Share Decline and Investor Confidence
Following RBI’s action, Paytm’s shares have experienced a continuous decline, leading to lower circuits of around 20 percent on February 1 and 2.
The current share price hovers close to Rs 487.
Paytm is actively communicating to reassure investors that the regulatory measures will not impact customer funds,
emphasizing their commitment to safeguarding user finances.