After the Reserve Bank of India (RBI) cracked down against Paytm Payments Bank and its regulatory violations, traders’ body CAIT issued a cautionary advice to Paytm users, urging them to switch to other payment apps.
The Confederation of All India Traders (CAIT) said in a statement that traders are advised to use payment platforms other than Paytm for business-related transactions as RBI has sounded an alarm about several risks in Paytm Payments Bank due to KYC violations.
RBI Imposed Restrictions
- The Reserve Bank of India has imposed certain restrictions, prompting CAIT to recommend that users take proactive measures to protect their funds and ensure uninterrupted financial transactions.
- A large number of small traders, vendors, hawkers, and women are making payments through company, and as such RBI restrictions on the company could lead to financial disruption for these people.
- RBI on company has raised concerns about the security and continuity of financial services provided by the platform.
Paytm Will Continue to Function After 29 Feb
Sharma had said that Paytm will continue to function normally even after the February 29 deadline imposed by the RBI. However, it is speculated that can permanently suspend the workings of Payments Bank after this deadline.
RBI’s Concerns Against Paytm Payments Bank
This advisory by CAIT comes shortly after RBI issued a notice to Vijay Shekhar Sharma-led Payments Bank, raising concerns regarding money laundering as the bank failed to meet the regulator’s norms for KYC of customers.
This means customers can access their existing deposits and pay for services with money stored in their wallets till February 29. And in case, RBI does not relent, top-ups for wallet will stop and transactions through it can no longer can be carried.