News Update

CAIT Urges Paytm Users to Switch to Other Payment Apps Amid RBI Crackdown


The Confederation of All India Traders (CAIT) has issued a cautionary advice to Paytm users following the Reserve Bank of India’s (RBI) crackdown on Paytm Payments Bank for regulatory violations. CAIT urged users to switch to other payment apps for business-related transactions, citing RBI’s concerns about KYC violations and potential risks associated with Paytm Payments Bank.

In a statement, CAIT emphasized the need for proactive measures to protect funds and ensure uninterrupted financial transactions. The traders’ body highlighted the significant reliance of small traders, vendors, hawkers, and women on Paytm for payments, warning that RBI’s restrictions on Paytm could disrupt their financial operations.

Praveen Khandelwal, Secretary General of CAIT, expressed concerns about the security and continuity of financial services provided by Paytm in light of RBI’s recent restrictions. He urged traders to act promptly and make informed decisions to mitigate any potential adverse effects on their financial operations.

Earlier, Paytm founder Vijay Shekhar Sharma had clarified that RBI’s notice against Paytm Payments Bank would not impact the business of the Paytm app, as the two are separate entities. However, there is speculation that RBI may permanently suspend the workings of Paytm Payments Bank after the February 29 deadline.

RBI’s notice to Paytm Payments Bank raised concerns about money laundering, as the bank failed to comply with the regulator’s norms for KYC of customers. The central bank has directed Paytm Payments Bank Ltd (PPBL) to halt most of its business activities, including taking further deposits, conducting credit transactions, and carrying out top-ups on customer accounts, prepaid instruments, wallets, and cards for paying road tolls after February 29.

Customers will be able to access their existing deposits and pay for services with money stored in their wallets until February 29. However, if RBI does not relent, top-ups for the Paytm wallet will stop, and transactions through it will no longer be possible.

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