RBI bars Paytm Payments Bank from acquiring new customers

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Mumbai: The Reserve Bank of India (RBI) has barred Paytm Payments Bank (Paytm PB) from onboarding new customers with immediate effect because of certain supervisory concerns.

Furthermore, the banking regulator has directed Paytm PB to appoint an IT audit firm for conducting a comprehensive system audit of its IT system. Paytm PB will need specific permission from the RBI to restart the onboarding of customers following a review of the audit.

The RBI said the action is based on certain material supervisory concerns observed in the bank, without divulging details. Vijay Shekhar Sharma, founder & CEO of Paytm, and One97 Communications together own Paytm Payments Bank, which has over 58 million account holders. Sharma is the chairman of Paytm Payments Bank; Satish Kumar Gupta is its managing director & chief executive officer.

Friday’s action comes two days after several reports said that the Paytm Payments Bank may approach the RBI for a small finance bank licence by June.

 

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