The Reserve Bank of India (RBI) has banned Paytm's banking services from February 29. Due to this, a big problem has emerged among shopkeepers and customers using Paytm's services. Many had added money to Paytm's wallet which gets automatically turned debited whenever they shop at merchants. But that is no longer the case. This is causing problems for these customers.
On January 31, the RBI had announced restrictions on Paytm. According to this, the deposit of money in FASTag, wallet and bank account has also been banned. This has started benefiting Paytm's biggest competitor, PhonePe. The company has started sticking its barcodes in large numbers in many places, grocery stores, etc.
Many shopkeepers have started pasting phonepe barcodes on Paytm's barcodes. As a result, customers who have put money in their Paytm wallet will have to pay from the UPI account if they scan the barcodes of other companies. This has led to money in the wallet getting stuck and making it difficult to use it.
The main reason for banning Paytm Payments Bank is the millions of accounts created without proper identification. The KYC process under this account has not been completed. Not only this, transactions worth crores of rupees without identity cards have also taken place, which created a fear of money laundering. According to a Reuters report, the biggest reason for the RBI's ban was that the accounts of more than 1,000 users under Paytm Payments Bank were linked to a PAN. Moreover, an investigation conducted by both RBI and auditors found that Paytm Bank was not complying with the rules.