RBI Bans Paytm Payments Bank From Taking New Customers.
Paytm Payments Bank has been ordered by the Reserve Bank of India (RBI) to halt accepting new customers with immediate effect, citing “serious supervisory concerns found in the bank.”
The Reserve Bank of India said that the bank has also been asked to appoint an audit company to perform a complete assessment of its IT system.
According to a press release, “Paytm Payments Bank Ltd is being sued under Section 35 A of the Banking Regulation Act of 1949.
As a result, the Reserve Bank of India (RBI) has asked Paytm Payments Bank Ltd to suspend onboarding new customers with immediate effect, by its powers under section 35A of the Banking Regulation Act, 1949.”
“A complete System Audit of the bank’s IT system has also been ordered. Paytm Payments Bank Ltd would be required to obtain explicit approval from RBI after examining the IT auditors’ report before onboarding new clients. This action is being taken in response to some severe supervisory concerns that have been raised in the bank,” the press release stated.
Paytm Payments Bank was established in August 2016 and started operations in May 2017 from a Noida branch.
The RBI forbade HDFC Bank from introducing new digital products or services or issuing new credit cards unless it rectified recurring technical concerns in December 2020.
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