On Thursday, the Employees’ Provident Fund (EPFO), which operates under the ministry of labour and employment, issued a circular instructing its officers to refrain from accepting claims linked to the Paytm Payments Bank. The EPFO stated,
“All field officers are advised to refrain from accepting claims associated with bank accounts in Paytm Payment Bank effective February 23, 2024. They should initiate wide publicity to raise awareness about this change.”
EPFO Restricts Paytm Payments Bank Despite Previous Settlement Authorization
The EPFO, boasting a corpus of over 18 trillion rupees and covering nearly 30 crore workers, permitted the Paytm Payments Bank to settle claims in November last year.
The EPFO issued its order a week following the Reserve Bank of India’s directive for Paytm Payments Bank to cease accepting all deposits after February 29. The central bank stated, “No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime.”
RBI Attributes Action to ‘Persistent Non-Compliance’
In response to its action, the RBI clarified that the measures against Paytm Payments Bank stemmed from ‘persistent non-compliance’. RBI Governor Shaktikanta Das emphasized the regulator’s stance, stating, “We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us have to take action?”
However, the central bank specified that the action was directed solely at Paytm Payments Bank and would not affect the Paytm app. RBI Deputy Governor Swaminathan J clarified,
“Just one clarification, this particular action is against Paytm Payments Bank and not to be confused with Paytm App…App is not impacted by this action.”
Das acknowledged the public’s numerous questions and concerns regarding PPBL, indicating that the Reserve Bank would release a detailed FAQ (frequently asked questions) next week.