Fintech business Paytm has switched its nodal account from Paytm Payments Bank to Axis Bank. According to a regulatory filing, the move will allow Paytm QR, Soundbox, and card machines to continue operating after the Reserve Bank of India’s (RBI) March 15 deadline.
The RBI has directed Paytm Payments Bank Ltd (PPBL) clients and merchants to transfer their accounts to other banks by March 15, giving the ailing firm a further 15 days to close most of its operations, including deposits and credit transactions.
“The company has also shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlements as before.
“This arrangement is expected to seamlessly replace the nodal account that OCL was using with Paytm Payments Bank. Paytm Payment Services Ltd (PPSL), OCL’s wholly owned subsidiary has already been using the Axis Bank services since its inception,” Paytm said in a filing.
Paytm’s nodal account functions similarly to a master account, settling all of its customers’ and merchant transactions.
In the list of FAQs, the RBI stated that the Paytm QR code, Paytm Soundbox, and Paytm POS terminal will continue to work after March 15 if they are tied to other banks rather than PPBL.
“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.
“The shift of the nodal account to Axis Bank (by opening an Escrow Account) will ensure seamless merchant settlements as before. We strive to continue to empower Indians, contributing significantly to the country’s financial inclusion journey,” a Paytm spokesperson said.
The RBI has recommended PPBL consumers to obtain a new QR code connected to another bank or wallet account in order to accept payments after March 15.
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