Paytm Payments Bank: RBI bars Paytm Payments Bank from accepting new customers
Bengaluru:
The Reserve Bank of India has directed Paytm Payments Bank to stop accepting new customers with immediate effect, citing “material supervisory concerns observed in the bank”.
The Reserve Bank of India said in a statement that the bank has also been directed to appoint an audit firm to conduct a comprehensive audit of its IT system.
A press release said, “Action against Paytm Payments Bank Ltd. u/s 35A of the Banking Regulation Act, 1949. The RBI today, in exercise of its powers, inter alia, section 35A of the Banking Regulation Act, 1949 u/s 35A, has been directed. Paytm Payments Bank Ltd. shall prohibit the addition of new customers with immediate effect.”
“Bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT systems. Addition of new customers by Paytm Payments Bank Ltd. Specific permission to be given by RBI after review of the IT report 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 started its operations in May 2017 from a branch in Noida.
In December 2020, RBI barred HDFC Bank from launching any new digital products or services and issuing new credit cards until recurring technical issues are resolved by the lender.