New Delhi: One97 Communications (OCL), the parent company of Paytm, has announced a strategic move to shift its nodal account to Axis Bank from Paytm Payments Bank. This decision comes in response to the Reserve Bank of India’s (RBI) directive to terminate its nodal account with Paytm Payments Bank by February 29, citing persistent non-compliance and supervisory concerns.
What OCL Revealed In Exchange Filing?
In an exchange filing, OCL revealed that the transition to Axis Bank aims to ensure continuity and seamless settlements for merchants. (Also Read: RBI Gives 15-Day Relaxation To Paytm: Check What You Can Do And What Can’t)
A nodal account plays a crucial role for intermediaries like Paytm, as it holds funds on behalf of customers and vendors. With this shift, OCL aims to maintain smooth operations and enhance balance flow. (Also Read: Techie, With Rs 43 Lakh Salary, Seeking Job Where He Can Get High-Protein Food; Viral Story Amazes Netizens)
Axis Bank Partnership
Paytm Payment Services Ltd (PPSL), a wholly-owned subsidiary of OCL, has been utilizing Axis Bank’s services since its inception. This pre-existing partnership adds to the confidence in the transition process.
An official from Axis Bank emphasized that the new arrangement will facilitate the flow of money through the nodal account, reinforcing the commitment to efficient financial transactions.
RBI’s Directive And Deadline Extension
The RBI had initially ordered the termination of OCL and PPSL’s nodal accounts maintained by Paytm Payments Bank by February 29, due to compliance issues and supervisory concerns. However, the central bank extended the deadline till March 15 for the payments bank to halt new deposits or credit transactions.
Impact On Merchants
In its FAQ, the RBI clarified that merchants using Paytm’s services can continue accepting payments through QR codes, soundboxes, or point-of-sale terminals even after March 15, provided their accounts are linked to banks other than Paytm Payments Bank.
However, merchants linked to Paytm Payments Bank will only be able to receive refunds or cashback, with no other credit transactions allowed.
According to Paytm’s earnings presentation for the third quarter of the financial year 2024, the company has over 10.6 million soundboxes and point-of-sale devices deployed in the market, underlining its significant presence in the payment solutions sector.