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Paytm payments bank barred from onboarding clients
March 14, 2022
The Reserve Bank of India (RBI) Friday directed Paytm Payments Bank Ltd to stop onboarding new customers with immediate effect and conduct a comprehensive audit of its IT system, citing “material supervisory concerns”.
Onboarding of new clients by Paytm Payments Bank will be subject to specific permission to be allowed by RBI after reviewing the report of the IT auditors, the RBI said.
“This action depends on specific material supervisory concerns observed in the bank,” the central bank said.
“The RBI has, today, in the exercise of its powers, inter alia, under Section 35A of the Banking Regulation Act, 1949, guided Paytm Payments Bank to stop, with immediate effect, onboarding of new clients,” it said. The bank has likewise been coordinated to name an IT review firm to direct an exhaustive System Audit of its IT framework, the RBI said.
“This activity depends on specific material administrative concerns observed in the bank,” the central bank. Paytm Payments Bank got approval from the RBI in 2017.
For the year-finished March 31,2021, Paytm Payments Bank, which has the biggest scale among all payment banks, had recorded a net benefit of ₹17.88 crore on deals of ₹1,987.84 crore, as indicated by Paytm’s IPO plan. One97 Communications claims 49% value revenue in Paytm Payments Bank, while the rest 51% is owned by Vijay Shekhar Sharma.
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