Paytm QR Codes, Soundboxes To Remain Operational Only If Merchants Migrate To Other Banks: RBI

In detailed FAQs issued on the ongoing Paytm Payments Bank fiasco, the Reserve Bank of India (RBI) has clarified that Paytm QR codes, soundboxes and card machines will continue to be operational post the March 15 deadline, provided the merchants migrate to other banks. 

“… it is suggested that you (merchants) may obtain a fresh QR code linked to an account with another bank or wallet (other than Paytm Payments Bank) to receive payments. You may also change your bank account details (in which you receive payments) through your service provider,” the RBI clarified.

The FAQs also said that there will be no impact of RBI’s curbs on merchants using Paytm QR codes and soundboxes linked to other bank accounts.

Meanwhile, posting on X, Paytm founder and CEO Vijay Shekhar Sharma said that fintech’s offerings will continue to operate after the deadline. He, however, did not specify that the merchants would have to migrate to other banks.

“Paytm QR, Soundbox and EDC (card machine) will continue to work like always, even after March 15. The latest FAQ issued by RBI on point #21 clarifies it unambiguously. Do not fall for any rumour or let anyone deter you to (from) championing Digital India!” Sharma said.

However, in a separate statement, the fintech firm said that it was working with other banks and “accelerating these partnerships” to ensure uninterrupted services. It added that various UPI-related services such as eNACH and Autopay, etc. will continue to work beyond March 15.

However, it was not clear whether the users (especially Paytm Payments Bank customers) availing such services will have to migrate to other banks. 

A Paytm spokesperson said that the company continues to focus on business growth with the “highest” regard for compliance and regulatory guidelines.

The FAQs were released alongside the central bank’s order that extended the deadline for certain business restrictions on Paytm Payments Bank to March 15 from the earlier February 29.  

In its new order, the central bank allowed it to undertake deposits, credit transactions or top-ups till March 15, post which these services will have to be ceased. In addition, it also extended the timeline for the payments bank to undertake other banking services, such as UPI facility and fund transfers, till March 15.

Paytm Payments Bank was thrust into uncharted waters after the apex bank barred it from taking any deposits, credit transactions or top-ups in any of its customer accounts late last month. 

The aftermath saw a bloodbath on the bourses, as the stock of Paytm’s parent, One97 Communications, saw a massive selloff by retail investors. The shares hit a lower circuit for consecutive days, while the company issued a slew of clarifications to allay the fears of jumpy investors.

In the two weeks, the company’s stock has cratered more than 50%. 

RBI governor Shaktikanta Das recently said there was “hardly any room” to review the action on the payments bank. As if this was not enough, reports suggest that the payments bank was being probed by the Enforcement Directorate for alleged forex violations, which the company has denied. 

Shares of the company closed the day 5% higher at INR 341.50 on the BSE on Friday (February 16), despite hitting a record low of INR 318.35 during the intraday trading.

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