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RBI bars Paytm Payments Bank from accepting deposits after February 29

Published on January 31, 2024
Current Context: The Reserve Bank of India (RBI) did indeed bar Paytm Payments Bank (PPBL) from accepting deposits and credit transactions after February 29, 2024.
RBI bars Paytm Payments Bank from accepting deposits after February 29
  • This was due to "persistent non-compliance" and "material supervisory concerns" identified by the RBI.
  • Here are some key points to remember:
    • Effective date: The restriction on deposits and credit transactions took effect on March 1, 2024.
    • Reason for the ban: The RBI cited non-compliance with regulations and supervisory concerns identified in an external audit report.
    • What's affected: PPBL cannot accept new deposits, top-ups, or carry out credit transactions in any customer accounts, wallets, FASTags, etc. However, withdrawals and utilization of existing balances are permitted.
    • Future of PPBL: The current status of PPBL is unclear. The future course of action will depend on how PPBL addresses the RBI's concerns and seeks regulatory approval.

Question:

Q.1 Why did the RBI bar Paytm Payments Bank from accepting deposits after February 29, 2024?
a. The bank was not profitable enough.
b. The bank was involved in illegal activities.
c. The bank failed to comply with regulations and had supervisory concerns.
d. The bank merged with another bank.

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