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Paytm Payments Bank restricts transactions into Yes Bank accounts

"Paytm Payments Bank Ltd (PPBL) today (Friday) announced that they are restricting transaction settlements, including UPI, into Yes Bank accounts to safeguard their users' money," PPBL said in a state

Press Trust of India  |  New Delhi 

paytm
The Indian banking system is currently under stress due to rising non-performing assets (NPAs) and other issues, it added.

Ltd (PPBL) on Friday restricted transaction settlements, including those done through platform, into cash-strapped Yes Bank's accounts.

The decision by PPBL follows the Reserve Bank of India's move to cap withdrawals from accounts at Rs 50,000 per depositor for a month and imposed strict limits on operations at the country's fourth-largest private lender that faced "regular outflow of liquidity" after an effort to raise new capital failed.

"Ltd (PPBL) today (Friday) announced that they are restricting transaction settlements, including UPI, into accounts to safeguard their users' money," PPBL said in a statement.

has been seeking funding since last year to bolster its financial ratios and quell questions about its stability due to its exposure to the non-banking financial company sector entangled in a prolonged crunch in the local credit market.

"While third-party apps that rely on Yes Bank have also been affected, the ecosystem has been designed in a way where customers can continue using other apps to transact on UPI. Paytm customers continue to use Paytm UPI and wallet service without any interruption as before," the statement said.

The Indian banking system is currently under stress due to rising non-performing assets (NPAs) and other issues, it added.

The case of restrictions on Yes Bank is second within a year after the Punjab and Maharashtra Co-operative Bank crisis in September 2019.

PPBL said that in a scenario where have been facing crisis in India, payment are safe and offer more safety and security to the deposited money.

Earlier in the day, PPBL took a dig on its rival PhonePe in the wake of obstruction it faced due to using cash-strapped Yes Bank's platform for transactions.

It said payments are not allowed to lend and, therefore, do not have the problem of NPAs. PPBL also added that such banks have to necessarily invest 75 per cent of customers' deposit money into government securities, which is the safest form of investment.

"Safety and security of our users' money are of utmost importance to us. We have stopped all transactions in Yes Bank accounts so that the money doesn't get blocked. We are also requesting users to change their primary bank account to some other bank. However, these restrictions are temporary in nature till the time we get more clarity on the situation," Satish Gupta, managing director and chief executive officer of PPBL, said.

First Published: Fri, March 06 2020. 18:48 IST
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