RBI Bans Paytm Payments Bank From Taking On New Customers; asks company to conduct IT audits

Reserve Bank of India has instructed Paytm Payments Bank Ltd to cease hiring new customers with immediate effect.

Reserve Bank of India has ordered Paytm Payments Bank Ltd to stop hiring new customers with immediate effect, citing “certain material supervisory concerns,” the central bank said. RBI has also asked Paytm Payments Bank Action of One 97 Communications Ltd to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

“Reserve Bank of India, in the exercise of its powers, inter alia, under Section 35A of the Banking Regulation Act, 1949, has instructed Paytm Payments Bank Ltd to cease onboarding new customers with immediate effect,” it said in a statement. a press release. statement Friday. “Onboarding of new customers by Paytm Payments Bank Ltd is subject to specific authorization to be granted by RBI upon review of the IT auditors’ report,” the statement added.

Vijay Shekhar Sharma-led Paytm Payments Bank is a joint venture, with One97 Communications Ltd holding a 49% stake and Sharma, the founder of Paytm, the remaining 51% stake. It claims to be the largest digital bank in the country with more than 58 million account holders, according to the Paytm website. According to a report from Moneycontrol, the company was reportedly expected to apply for a license for a small financial bank (SFB) in June. The bank is expected to be in business for five years in June and would therefore be eligible to apply for an SFB license, the report said.

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