Mumbai, March 6, 2020: Paytm Payments Bank Ltd (PPBL), which is India’s largest & only profitable payments bank, has today announced that they are restricting transaction settlements, including UPI, into Yes Bank accounts to safeguard their users’ money. Post the RBI moratorium on withdrawal of money from Yes Bank, PPBL has taken this step to ensure that its users’ money doesn’t get stuck in their Yes Bank accounts where they are unable to move their money out.
While third-party apps that rely on Yes Bank have also been affected, the UPI ecosystem has been designed in a way where customers can continue using other UPI apps to transact on UPI. Paytm customers continue to use Paytm UPI and wallet service without any interruption as before.
The Indian banking system is currently stress due to rising NPAs and other issues. Yes Bank restrictions are second such cases within a year after Punjab and Maharashtra Co-operative (PMC) Bank crisis last September. In such a scenario, payment banks are the safest banks in India and offer more safety & security of the deposited money. Payment banks are not allowed to lend, therefore do not have the problem of NPAs. Also, they have to necessarily invest 75 percent of customers’ deposit money into Government securities – which is the safest form of investment.
Satish Gupta, MD & CEO of PPBL said, “Safety and security of our users’ money are of utmost importance to us. We have stopped all transactions to 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.”
PPBL continues to be India’s most successful payment bank and a comprehensive platform of funding sources. Besides 100 million UPI handles, there are 300 million wallets, 220 million saved cards and 55 million bank accounts on the platform. While for other banks UPI transactions are mostly driven by third-party apps, PPBL is the only bank in the country that organically drives UPI transactions from within the Paytm’s ecosystem.