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RBI whip on Paytm Bank may not impact payments significantly: Report
The Reserve Bank of India's recent move to stop Paytm Payments Bank from accepting new deposits or conducting credit transactions after February 29 is not expected to have a significant impact on payments, according to a news report in Business Standard. This is because most of the users of the Paytm UPI app have already linked their accounts with other banks. The report cites data from banking industry sources that reveal that out of around 90 million Paytm UPI app users, 75 million of them have also installed other UPI apps, and only 15 million users are unique to Paytm UPI app. As per the data, the restrictions on Paytm Payments Bank may not have a substantial impact since 90 percent of Paytm's UPI users have accounts linked with other banks, and most users have multiple backend accounts that are out of the scope of the central bank's curbs. The Reserve Bank of India (RBI) has prohibited Paytm Payments Bank Ltd (PPBL) from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, and FASTags after February 29. This action was initiated on January 31 and mandates PPBL to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags, and other instruments after February 29. Reserve Bank of India Governor Shaktikanta Das has stated that there is limited scope for reconsidering the measures taken against Paytm Payments Bank. Das emphasised that the central bank takes action against regulated entities only after conducting a thorough evaluation. Speaking during a press interaction in New Delhi, Das reiterated that there is hardly any room for a review of the action. Additionally, the government is scrutinising foreign direct investments from China in the payment aggregator subsidiary of the fintech company. The focus is on Chinese investments in Paytm Payments Services Ltd (PPSL), which has sought a licence from the RBI to operate as a payment aggregator, according to a PTI report. Source - Money Control
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