Facing the aftermath of regulatory action against Paytm Payments Bank or PPBL, fintech giant Paytm has forged a strategic partnership with Axis Bank to facilitate seamless merchant transactions. One97 Communications, the parent company of Paytm, has transferred its nodal account from Paytm Payments Bank to Axis Bank, ensuring continuity of essential services like Paytm QR, Soundbox, and card machines beyond the March 15 deadline set by the Reserve Bank of India-RBI.
This move follows RBI’s directive urging merchants and customers to transition their accounts from Paytm Payments Bank to alternative banking institutions before the cut-off date of March 15. The deadline extension by 15 days aims to facilitate the closure of most operations, including deposit and credit transactions, for the troubled payments bank.
In its official filing, Paytm stated, “The company has shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlements as before.”
This arrangement ensures the smooth transition of the nodal account previously held with Paytm Payments Bank. Paytm Payment Services Ltd (PPSL), a subsidiary of One97 Communications, has been utilising Axis Bank services since its inception.
Notably, the nodal account serves as Paytm’s primary account for settling transactions conducted by customers and merchants. RBI clarified that services like Paytm QR code, Soundbox, or POS terminals will remain functional after March 15 if linked to alternative banks rather than PPBL.
This development follows recent concerns raised by the Financial Intelligence Unit (FIU) regarding KYC irregularities in numerous accounts associated with Paytm Payments Bank, prompting scrutiny over potential money laundering activities.
In light of ongoing developments, the Reserve Bank of India has advised all customers and merchants of PPBL to transition their banking operations to other institutions by March 15. This extends the previous deadline of February 29 set by the regulatory authority.
RBI further announced that customers and merchants would retain access to their PPBL accounts for withdrawal or utilisation of balances, including savings accounts, current accounts, pre paid instruments, FASTags, and National Common Mobility Cards, without any restrictions, even beyond March 15. However, transactions and deposits into PPBL accounts will be restricted post-deadline, as per RBI’s directives.
