RBI denies Paytm's request for extention, unlikely to engage further: Report

The Reserve Bank of India (RBI) has reportedly declined to grant concessions requested by Paytm Founder and CEO Vijay Shekhar Sharma in their meeting regarding the beleaguered Paytm Payments Bank Limited (PPBL).

Sharma had requested the central bank to extend the deadline for migration of accounts to other banks beyond February 29, 2024, according to a MoneyControl report. The regulator refused to help PPBL in any manner, the report noted.

RBI declined Paytm's requests and is unlikely to engage with Sharma for further discussions due to PPBL's failure to comply with the KYC of users despite warnings the report said.

Sharma's meeting with Finance Minister Nirmala Sitharaman also reportedly lasted only 10 minutes, with the minister asking the entrepreneur to sort out the compliance issues with the regulator.

YourStory has reached out to Paytm for a comment.

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Paytm now faces the task of transferring all accounts using PPBL as settlement accounts to third-party banks before February 29 to ensure smooth UPI payments. However, existing regulations require fresh Know Your Customer (KYC) verification for all savings accounts.

The payments bank may need to convince its users to link their UPI to another bank account in order to prevent customers, who already use multiple UPI accounts in some cases.

Each UPI app allows users to add multiple bank accounts simultaneously. Due to PPBL's inability to onboard new customers for nearly two years, Paytm collaborated with other banks. Consequently, users can link additional bank accounts to their Paytm app for UPI transactions.