The Reserve Bank of India (RBI) has recently imposed certain restrictions on Paytm Bank, prompting CAIT to recommend that users take proactive measures to protect their funds and ensure uninterrupted financial transactions.
In response to this developments, the Confederation of All India Traders (CAIT) has issued an advisory to traders across the country to switch from Paytm to other payment options.
Large number of small traders, vendors, hawkers and women are making payments through Paytm and as such RBI restrictions on Paytm could lead financial disruption to these people, said CAIT.
CAIT National President B C .Bhartia and Secretary General Praveen Khandelwal said that the recent restric- tions imposed by RBI on Paytm have raised concerns about the security and continuity of finan- cial services provided by the platform.
Bhartia and Khandelwal said that one of the major reasons for the ban on Paytm Payment Bank was the creation of millions of accounts without proper identification. The process of Know Your Customer (KYC) was not completed for these accounts. Moreover, transactions involving millions of rupees were conducted without prop- er identification, raising concerns about money laundering.
As per media reports, the RBI) imposed the ban primarily because Paytm Payment Bank had linked over a thousand users to a single PAN (Permanent Account Number). Additionally, both the RBI and auditors found that Paytm Payment Bank was not adhering to regulatory rules.
CAIT believes that if there is any evidence of fund irregularities, the Enforcement Directorate (ED) should investigate Paytm Payment Bank. Bhartia and Khandelwal under- scored the importance of risk mitigation for traders, urging them to explore alternative payment applications that are compliant with regulatory guidelines. To ensure the seamless functioning of transactions and safeguard financial assets, both trade leaders advised Paytm users to transition to other payment apps or consider direct UPI transactions.