More trouble for Paytm, EPFO blocks transactions into accounts linked with Paytm Payments Bank

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PayTM is facing more trouble as the Employee Provident Fund Organisation (EPFO) has announced that it will block deposits and credits into EPF accounts linked with Paytm Payments Bank. This comes after the Reserve Bank of India announced restriction on One 97 Communications’ digital payments gateway, starting February 23rd.

EPFO instructions

In a circular dated February 8th, the EPFO directed its field officers to not accept claims associated with Paytm Payments Bank Limited (PPBL) accounts. 

“All the field officers are advised to refrain from accepting claims associated with bank accounts in Paytm Payment Bank w.e.f February 23, 2024. A vide publicity should be initiated to raise awareness about this change,” said the circular.

EPFO, which has a corpus of over 18 trillion rupees (over $216 billion) and covers nearly 300 million workers, had allowed the Paytm Payments Bank and Airtel Payment Bank to settle claims in November last year.

RBI orders

The Reserve Bank of India (RBI) on January 31 ordered Paytm’s banking arm Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular wallets from March. 

In a statement, the RBI said that Paytm Payments Bank will not be allowed to take further deposits in any customer accounts after Feb 29, and no credit transactions will be allowed either, including via wallets.

“The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” said the RBI.

“No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after Feb 29, 2024, other than any interest, cashback, or refunds which may be credited anytime,” it added.

“Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, up to their available balance,” the RBI further said.

(With inputs from agencies)

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