One97 Communications Limited (OCL), the parent entity of fintech firm Paytm, has migrated its nodal account to private sector lender Axis Bank through creation of an escrow account. This follows the Reserve Bank of India (RBI) granting an extension until March 15th for compliance with business restrictions imposed on Paytm Payments Bank.
The nodal account shift is expected to enable seamless continuation of merchant settlements for payments collected via Paytm’s QR codes, Soundbox devices and card machines. Axis Bank is also the nodal account bank for Paytm’s payment processing subsidiary Paytm Payment Services Limited (PPSL) since inception.
RBI Extends Compliance Deadline Earlier, the RBI had ordered that Paytm Payments Bank’s nodal accounts with OCL and PPSL be wound up by February 28th while barring new user onboarding. This led to uncertainties around settlements for merchants, even though RBI clarified bank transfers will continue.
Now with the deadline extended, Paytm has proactively migrated its nodal account for merchant settlements to Axis Bank as a prudent measure to prevent potential disruptions next month in case issues persist with Paytm Bank.
Paytm Vows Compliance, Uninterrupted Services Paytm spokesperson said the company remains fully committed towards compliance with regulatory guidelines while assuring over 300 million users and 10 million merchants that its payments instruments – Paytm QR codes, Soundbox and card machines – will function seamlessly as before.
The spokesperson added that Paytm strives to continue empowering Indians while contributing significantly to the country’s financial inclusion objectives.
The nodal account shift combined with RBI’s ongoing audit of Paytm Payments Bank is expected to eventually pave the way for lifting of restrictions depending on improvements in compliance and risk controls. But currently, Paytm has adopted a workaround to avoid disruptions.
