The Reserve Bank of India (RBI) on Wednesday barred Paytm Payments Bank Ltd from taking fresh deposits and credit transactions across its services.

The punitive action was taken against Paytm Payments Bank on account of non-compliance of regulations and supervisory concerns.

Paytm Payments Bank will not be allowed to take further deposits in any customer accounts after 29 February, the RBI said.

An audit report revealed "persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action," the central bank said in a release.  

It added that no credit transactions or top ups will be allowed in any customer accounts, including via wallets, prepaid instruments, FASTags, NCMC cards. 

The withdrawal or utilisation of balances by its customers from their accounts will be permitted without restrictions, the central bank said.

 Earlier in March 2022, the RBI had directed Paytm Payments Bank to stop onboarding new customers with immediate effect.