RBI has put restrictions on Paytm Payments Bank only
On January 31, 2023, Roshni Kushal Jaiswal, a spokesperson for Congress, posted a video on social media. In the video, she said that the Paytm app, which Prime Minister Modi had promoted, is now going to be banned by the RBI (Reserve Bank of India). She further made fun of PM Modi by calling him “panauti. Moreover, along with the video, she wrote, Paytm matt karo, Big crackdown by RBI on Paytm.
An X handle named Kamal Raj Singh wrote, Paytm banned, UPI service can also be closed soon, whose money is in Wallet, Payment Bank, withdraw immediately otherwise the money can also get stuck.
An X handle named Investing Daddy wrote, RBI says Don’t do Paytm. Paytm Banned.
An X handle named KUSHALX wrote, RBI se Gaddari padh gya bhari. Paytm banned.
TMC MP Jawhar Sircar wrote, PAYTM had lauded Modi’s Himalayan Blunder Demonetisation — so much that it was called ‘Pay To Modi’. It is blacklisted today by RBI — told not to take deposits, etc.
Another X handle named Delhi Breakings wrote, Paytm Fully Stopped By Order of RBI Now. Million Users Affected by Decision. UPI and Bank All Banned.
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During our investigation, we first did a keyword research with the relevant keywords. During this, we stumbled upon a Hindustan Times report dated February 1, 2024. According to this report, the Reserve Bank of India (RBI) took a significant step by restricting Paytm Payments Bank Ltd. from accepting new deposits and conducting credit transactions. The RBI stated that this action was a result of the bank’s continuous failure to comply with regulations.
The report also shed light on what a Payments Bank is. Essentially, it’s a financial services company with certain limitations—it can’t accept deposits exceeding ₹2 lakh per account, and direct lending is not allowed. However, it can sell loan products and promote third-party loans. Paytm Payments Bank, as per the RBI’s decision, won’t be able to take new deposits after February 29. Credit transactions, including through wallets, will also be halted. This means the bank won’t be able to provide loan funds directly to customers through its accounts or wallets. Yet, customers can still withdraw or use their existing balances without any restrictions.
Furthermore, the bank won’t be permitted to offer fund transfers, including through India’s widely-used Unified Payment Interface (UPI). This implies that if someone wants to transfer their balance from Paytm Payments Bank via UPI, they won’t be able to do so. After February 29, 2024, no additional deposits, credit transactions, or top-ups will be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., except for any interest, cashbacks, or refunds that may be credited later.
However, it’s important to note that the Paytm wallet application and UPI services linked to accounts with other banks will not be affected by the RBI’s deadline; only services associated with payments bank accounts are likely to face restrictions.
After this, we stumbled upon an official press release from the Reserve Bank of India (RBI) on their official website. This official statement clarified that the regulatory action had specifically targeted Paytm Payments Bank only.
In our ongoing investigation, we came across another insightful report, this time from India Today, published on February 1, 2024. The report revealed that following alleged “persistent non-compliance,” the Reserve Bank of India (RBI) had imposed a series of restrictions on Paytm Payments Bank, set to take effect on February 29. These restrictions would impact new deposits, credit transactions, and might even prevent new users from creating accounts on the platform.
As indicated by the RBI’s press release, the limitations would extend to all Paytm users, affecting Paytm wallets, Fastags, and mobility cards. However, a recent statement from Paytm offered reassurance that existing users could still utilize the platform’s payment solutions, and offline services would remain accessible beyond February 29.
The report also mentions Paytm’s official statement. According to Paytm’s statement, the Paytm Payment Gateway business for online merchants would persist, providing continued payment solutions to existing merchants. Additionally, Paytm’s offline merchant payment network offerings, including Paytm QR, Paytm Soundbox, and Paytm Card Machine, would operate as usual, allowing the onboarding of new offline merchants. Despite the challenges faced by Paytm Payments Bank, it appears that Paytm is working to maintain its services for existing users and merchants even after the stipulated date.
Furthermore, concerning the assertion that PM Modi actively endorsed Paytm, our investigation found no concrete evidence supporting such a claim. However, it’s worth noting that in 2017, the Modi government took notice when both Reliance Jio and Paytm used Prime Minister Narendra Modi’s images in their advertisements to promote their products in 2016. As reported by Hindustan Times on March 10, 2017, both telecom company Reliance Jio and digital wallet Paytm issued apologies for what they referred to as an “inadvertent mistake” in the unauthorized use of Prime Minister Narendra Modi’s photographs in their advertisements.
In conclusion, these findings prove that PM Modi never endorsed or promoted the Paytm App. Furthermore, it’s important to note that the RBI has only imposed restrictions on Paytm Payments Bank and not on the Paytm App. The distinction is crucial, emphasizing that the regulatory measures are specific to the banking aspect of Paytm, leaving the main Paytm App unaffected.
| Claim | Paytm App which was endorsed and promoted by PM Modi is now banned by RBI. |
| Claimed by | Congress Spokesperson Roshni Kushal Jaiswal |
| Fact Check | Misleading |
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