Paytm Payments Bank Barred From Onboarding New Customers; Know Why

New Delhi: The Paytm Payments Bank has been barred from opening any new accounts because of ‘material supervisory concerns’ observed in the bank.

“Reserve Bank of India has today, in the 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,” RBI said in a statement.

RBI has directed Paytm Payments Bank to appoint an IT audit firm to conduct a comprehensive system audit of its IT system, the statement added.

“Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing the report of the IT auditors,” RBI further said.

Paytm Payments Bank, which started operations in May 2017, received RBI’s approval to function as a scheduled payments bank in December 2021.

There were reports recently that Paytm Payments Bank is mulling approaching RBI for a small finance bank licence.

Paytm founder Vijay Shekhar Sharma owns 51% of the bank.

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