Friday, February 23, 2024

CAIT advises traders to switch from Paytm to other payment apps in light of RBI action

Paytm app is seen on a smartphone in this illustration image. File

Paytm app is seen on a smartphone in this illustration image. File
| Photo Credit: Reuters

Traders’ body CAIT on February 4 issued a cautionary advisory to traders to switch from Paytm to other payment options for business-related transactions following RBI curbs on Paytm wallet and bank operations.

“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. Large number of small traders, vendors, hawkers and women are making payments through Paytm and as such RBI restrictions on Paytm could lead financial disruption to these people,” the Confederation of All India Traders (CAIT) stated.

Money laundering concerns and questionable dealings of hundreds of crores of rupees between popular wallet Paytm and its lesser-known banking arm had led Reserve Bank of India to clamp down on tech poster boy Vijay Shekhar Sharma-run entities, according to sources.

The central bank has ordered Paytm Payments Bank Ltd (PPBL) to halt most of its business including taking further deposits, conducting credit transactions and carrying out top-ups on any customer accounts, prepaid instruments, wallets, and cards for paying road tolls after February 29.

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-up for Paytm wallet will stop and transactions through it would no longer can be carried.

CAIT Secretary General Praveen Khandelwal said that the recent restrictions imposed by RBI on Paytm have raised concerns about the security and continuity of financial services provided by the platform.

He emphasised the urgency of this advisory, urging traders to act promptly and make informed decisions to mitigate any potential adverse effects on their financial operations.

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