Paytm shifts nodal account to Axis Bank

Paytm has shifted its nodal account to Axis Bank, it said on February 16, shortly after the RBI has extended the deadline for winding down its Payments Bank operations.

“This arrangement is expected to seamlessly replace the nodal account that OCL was using with Paytm Payments Bank,” One97 Communications, operating as Paytm, informed the exchanges.

An Escrow account is a temporary pass-through account which is held by a third party during a transaction between two parties.

Notably, Paytm Payment Services, a wholly-owned subsidiary of parent One97 Communications has already been using services of Axis Bank since its inception,Paytm said.

In a 30-point clarification or Frequently-asked-Questions (FAQs) pertaining to merchant and user transactions, the RBI said Paytm QR, Soundbox, and Card Machine will continue to operate seamlessly for all our merchant partners as long as they are not linked to Paytm Payments Bank.

“We are committed to providing seamless service to our merchant partners, with focus on compliance and regulatory guidelines. We assure our users that the Paytm app, and our pioneering devices like Paytm QR, Soundbox, Card Machine will continue to work as always,” a spokesperson for the company said.

RBI had earlier mandated One97 Communications to stop operations for Paytm Payments Bank from February 29. This date was extended today to March 15, "keeping in mind ‘the interest of consumers’ and merchants on the listed fintech platform.

Taking cognisance of merchant interest, RBI said they “may require a little more time to make alternative arrangements and the larger public interest.” 

Paytm has over 20 million merchants and businesses on its platform, and is used by 300 million consumers for transactions, it states.

The RBI has issued a 30-pointer guideline on business restrictions imposed on Paytm Payments Bank, for savings and current accounts, deposits and recurring payments, among other concerns.

Paytm Payments Bank has further been directed by RBI to facilitate withdrawals upto their available balance from all accounts and wallets, ‘excluding the ones that are frozen or lien marked by Law Enforcement or judicial authorities.’