Register alternate bank for trading as Paytm deadline nears, BSE warns investors

If you've been using your Paytm Payments Bank (PPBL) account for your trading activities, it's time to consider adding another bank account to your setup.

The Bombay Stock Exchange (BSE) issued an advisory on March 12 to investors who have exclusively linked their PPBL accounts for trading purposes.

"Investors’ attention is drawn to recent regulatory actions announced by the Reserve Bank of India through its press releases dated January 31, 2024, and February 23, 2024. These actions impose restrictions on Paytm Payments Bank Ltd, including limitations on further deposits, credit transactions, or top-ups to customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., effective March 15, 2024. Exceptions are made for interest, cashbacks, or refunds," stated the BSE press release.

"Investors are hereby informed that these restrictions may impact the securities market transactions of those investors who have registered bank accounts exclusively with Paytm Payments Bank Ltd with their trading members. In light of this, investors are advised to review their current banking arrangements and add additional bank accounts with other banks to avoid any transactional impact due to the aforementioned RBI directive," it added.

Here's the lowdown: On January 31, the RBI decided to halt new deposits and credit transactions in PPBL accounts, initially setting the deadline for February 29. This deadline has since been extended to March 15. Beyond this date, you won't be able to add new funds to your PPBL account, except in specific scenarios such as receiving interest, cashbacks, or refunds.

Why does this matter for you as an investor? Without an alternative bank account, these restrictions could affect your securities market transactions, potentially leading to delays or complications.