RBI Bans Paytm Payments Bank From Taking On New Customers

Paytm Payments Bank: RBI bans Paytm Payments Bank from taking on new customers

BENGALURU:

The Reserve Bank of India has directed Paytm Payments Bank to stop taking on new customers with immediate effect, citing “material supervisory concerns observed in the bank.”

The bank has also been directed to appoint an audit firm to conduct a comprehensive audit of its IT system, the Reserve Bank of India said in a statement.

A press release said, “action against Paytm Payments Bank Ltd under section 35 A of the Banking Regulation Act, 1949. The RBI has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers.”

“The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” the press note added.

Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida.

In December 2020, the RBI had barred HDFC Bank from launching any new digital products or services and issuing new credit cards till the lender resolved recurring tech issues.