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EPFO limits Paytm transactions linked with EPF accounts: The Reserve Bank of India (RBI) instructed Paytm Payments Bank to halt all banking services, including deposit acceptance and payment processing, on January 31, with effect from February 29. Consequently, in response to this directive, the Employees’ Provident Fund Organisation (EPFO) has imposed limitations on deposit and credit transactions for subscribers’ EPF accounts linked to Paytm Payments Bank accounts.
According to a circular dated February 8, the EPFO has instructed its Field Offices to discontinue accepting claims associated with bank accounts in Paytm Payment Bank Limited starting from February 23.
Interestingly, just last year, the EPFO had authorised its banking section to facilitate EPF payments into accounts held with Paytm Payment Bank and Airtel Payments Bank.
ALSO READ | Worried about Paytm UPI & FASTag migration? RBI to meet NPCI, NHAI officials to rescue Paytm customers
This is what the RBI circular about Paytm Payments Bank said:
After February 29, 2024, customers cannot make any more deposits, credit transactions, or top-ups in their accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., except for interest, cashbacks, or refunds that may be credited at any time.
Customers are allowed to withdraw or use the balances in their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to the amount available in their account.
ALSO READ | Provident Fund interest rate FY24: EPFO likely to propose 8% rate for FY24
After February 29, 2024, the bank must not provide any banking services other than those mentioned in the previous point, such as fund transfers (including AEPS, IMPS, etc.), BBPOU, and UPI facility.
All pending transactions and nodal accounts, pertaining to transactions initiated on or before February 29, 2024, must be settled by March 15, 2024. After this date, no further transactions will be allowed.
Why did the RBI take this action?
“The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” stated the RBI press release.
According to a circular dated February 8, the EPFO has instructed its Field Offices to discontinue accepting claims associated with bank accounts in Paytm Payment Bank Limited starting from February 23.
Interestingly, just last year, the EPFO had authorised its banking section to facilitate EPF payments into accounts held with Paytm Payment Bank and Airtel Payments Bank.
ALSO READ | Worried about Paytm UPI & FASTag migration? RBI to meet NPCI, NHAI officials to rescue Paytm customers
This is what the RBI circular about Paytm Payments Bank said:
After February 29, 2024, customers cannot make any more deposits, credit transactions, or top-ups in their accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., except for interest, cashbacks, or refunds that may be credited at any time.
Customers are allowed to withdraw or use the balances in their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to the amount available in their account.
ALSO READ | Provident Fund interest rate FY24: EPFO likely to propose 8% rate for FY24
After February 29, 2024, the bank must not provide any banking services other than those mentioned in the previous point, such as fund transfers (including AEPS, IMPS, etc.), BBPOU, and UPI facility.
All pending transactions and nodal accounts, pertaining to transactions initiated on or before February 29, 2024, must be settled by March 15, 2024. After this date, no further transactions will be allowed.
Why did the RBI take this action?
“The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” stated the RBI press release.
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