India's Social Security Fund Suspends Claims via Paytm Payments Bank
India's state-run social security fund will no longer accept claims made through Paytm Payments Bank accounts starting from February 23rd. The move comes after the Reserve Bank of India imposed restrictions on the payments bank due to irregularities. The Employees' Provident Fund Organisation has instructed its officers to refrain from accepting claims linked with Paytm Payments Bank accounts.
India's Social Security Fund Halts Claims via Paytm Payments Bank
India's state-run social security fund will halt claims made via Paytm Payments Bank accounts from Feb. 23, as the country's central bank imposed restrictions on the payments bank due to persistent irregularities, a government order said.
The Employees' Provident Fund Organisation (EPFO) has asked its officers to refrain from accepting claims linked with accounts in Paytm Payments Bank, an associate of One 97 Communications, according to the order, which was reviewed by Reuters.
Restrictions Imposed by Reserve Bank of India
The order to suspend claims via Paytm Payments Bank comes after the Reserve Bank of India directed the bank to stop accepting new deposits in its accounts or digital wallets from March. The central bank cited supervisory concerns and non-compliance with rules as the reasons behind the restrictions. The EPFO had previously allowed Paytm Payments Bank to settle claims until November 2023.
The state-run social security fund, which oversees workers' pension funds, has a corpus of over 18 trillion rupees ($216.89 billion), covering nearly 300 million workers.
Impact on Paytm Payments Bank
The restrictions imposed by the Reserve Bank of India and the suspension of claims by the social security fund have significant implications for Paytm Payments Bank. As an associate of One 97 Communications, the payments bank will have to address the persistent irregularities and non-compliance issues to regain the trust of regulators and customers.
The move underscores the importance of ensuring regulatory compliance and adherence to rules in the financial sector. It serves as a reminder for all financial institutions to prioritize transparency, accountability, and ethical practices to maintain the integrity of the industry.
