CAIT advises traders to switch from Paytm over RBI action
The Confederation of All India Traders (CAIT) has issued a warning to traders, advising them to transition from using Paytm to alternative payment methods for conducting business transactions. This advisory comes in response to the Reserve Bank of India's restrictions on Paytm's 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. A large number of small traders, vendors, hawkers and women are making payments through Paytm and as such RBI restrictions on Paytm could lead to 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 the Reserve Bank of India to clamp down on tech poster boy Vijay Shekhar Sharma-run entities, according to sources. The central bank has directed Paytm Payments Bank Ltd (PPBL) to cease a significant portion of its operations, encompassing the acceptance of additional deposits, the execution of credit transactions, and the facilitation of top-ups for customer accounts, prepaid instruments, wallets, and cards designated for road toll payments, effective from March 1 onward.
This implies that customers have the ability to utilize their current deposits and make payments for services using the funds stored in their wallets until February 29. However, if the Reserve Bank of India does not reconsider its decision, the ability to add funds to the Paytm wallet will be suspended, and transactions through it will no longer be possible.
Expressing apprehension, Praveen Khandelwal, the Secretary General of CAIT, highlighted that the recent regulatory constraints imposed by RBI on Paytm have sparked worries regarding the security and uninterrupted provision of financial services by the platform. Stressing the critical nature of this advisory, he urged traders to promptly take informed actions to mitigate any potential negative impacts on their financial operations.
