CAIT cautions traders, advises switch from Paytm to other apps

New Delhi: The Confederation of All India Traders (CAIT) on Sunday issued a cautionary advisory to traders, urging them to switch from Paytm to alternative payment options for business-related transactions in light of the Reserve Bank of India’s (RBI) recent restrictions on Paytm’s wallet and bank operations.

The RBI’s imposition of specific restrictions has prompted CAIT to recommend proactive measures to safeguard funds and ensure uninterrupted financial transactions. CAIT expressed concern that the RBI’s restrictions on Paytm could potentially disrupt the financial activities of a large number of small traders, vendors, hawkers, and women who rely on Paytm for payments.

Money laundering concerns and questionable dealings of hundreds of crores of rupees between popular wallet Paytm and its lesser-known banking arm had led RBI to clamp down on tech poster boy Vijay Shekhar Sharma-run entities, according to sources.

The central bank has ordered Paytm Payments Bank Ltd (PPBL) to halt most of its business including taking further deposits, conducting credit transactions and carrying out top-ups on any customer accounts, prepaid instruments, wallets, and cards for paying road tolls after February 29.

This means customers can access their existing deposits and pay for services with money stored in their wallets till February 29. And in case, RBI does not relent, top-up for Paytm wallet will stop and transactions through it would no longer can be carried.

CAIT Secretary General Praveen Khandelwal said that the recent restrictions imposed by RBI on Paytm have raised concerns about the security and continuity of financial services provided by the platform.

He emphasised the urgency of this advisory, urging traders to act promptly and make informed decisions to mitigate any potential adverse effects on their financial operations.