Switch from Paytm to Other Payment Apps: Trader's Body CAIT to Businesses

Traders' body CAIT has asked traders to switch from Paytm to other payment options for business-related transactions following RBI curbs on Paytm wallet and bank operations.

Hyderabad:The Confederation of All India Traders (CAIT) on Sunday issued a cautionary advisory to traders to switch from Paytm to other payment apps following certain restrictions imposed by the Reserve Bank of India (RBI) on the app from February 29.

In a statement, the traders' body said, "A large number of small traders, vendors, hawkers and women are making payments through Paytm, and RBI restrictions on Paytm could lead to financial disruption to these people." CAIT National President BC Bhartia and Secretary General Praveen Khandelwal in the statement said the restrictions imposed by RBI on Paytm have raised concerns about the security and continuity of financial services provided by the platform.

To help traders reduce risk, Bhartia and Khandelwal urged them to look into alternate payment methods that are compliant with regulatory guidelines. "CAIT believes that if there is any evidence of fund irregularities, the Enforcement Directorate (ED) should investigate Paytm Payment Bank," the release said.

The officials further stated that the major reason 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 proper identification, raising concerns about money laundering," Khandelwal added.

Paytm Payments Bank Ltd (PPBL) has been directed by the Central Bank to halt the majority of its operations, which includes deposits, credit transactions, carrying out top-ups on any customer accounts, prepaid instruments, wallets and cards used to pay for tolls on the road after February 29.

According to sources, one of the main causes of the Reserve Bank of India's strict restrictions on the company was the hundreds of accounts opened on Paytm Payments Bank without the required identity. Sources said that over 1,000 individuals had connected their accounts to the same Permanent Account Number (PAN).

Both the RBI and the auditors discovered during the verification process that the compliance that the bank had submitted was inaccurate. Sources further said that RBI is worried that some accounts may have been used for money laundering.

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