Paytm Payments Bank: The Reserve Bank of India has officially revoked the license of Paytm Payments Bank. This decision may pose challenges for customers whose loan EMIs, mutual fund SIPs, or OTT subscriptions were associated with this bank account. However, the good news is that your funds in your bank account are entirely secure. We will clarify the effects on your EMIs, SIPs, and subscriptions, as well as what actions you should take.
Will you lose your money?
Both the RBI and Paytm have confirmed that customers’ funds are safe. All balances in savings accounts, current accounts, wallets, FASTags, and NCMC cards are protected. A liquidator will be appointed to oversee a “winding-up” process. Customers’ balances will be verified, and they will be requested to provide details of another bank account for the transfer of their funds.
What will happen to your EMI, SIP, and subscription?
If you had set up auto-pay using a Paytm Payments Bank account, those payments will now fail. Missing your loan payments on time could lead to penalties and a negative impact on your CIBIL credit score. Additionally, electricity bills, gas bills, and OTT subscriptions like Netflix will no longer be automatically debited. If you are using the Paytm app linked to a different bank, such as SBI or HDFC, your UPI services will continue to work as usual.
What does the ‘winding-up’ process entail?
This is a formal procedure for closing a bank. The bank’s operations are ceased, and depositors’ funds are returned by liquidating the bank’s assets. Experts indicate that due to the bank’s adequate liquidity, all customers will receive their full refunds.
What should you do right away?
Policy experts recommend that customers take these three crucial steps:
Change Mandate: Immediately unlink all your auto-pays, EMIs, and SIPs from Paytm Payments Bank and connect them to a different bank account.
Check Balance: Review your account balance and prepare for the verification process.
Increase banking options: To avoid such a situation in the future, keep your banking transactions divided among different banks instead of keeping them in one place.
Will the Paytm app continue to work?
Paytm clarified that this action only affected Paytm Payments Bank. The Paytm app, its UPI services in partnership with Axis, HDFC, SBI, and YES Bank, and other services like ‘Paytm Money’ will continue to function as usual. This means you will be able to make UPI payments through Paytm; only Paytm Bank has been shut down.
