Paytm Payments Bank Barred From Onboarding New Customers by RBI With Immediate Effect

RBI has directed Paytm to appoint an audit firm to conduct a comprehensive audit of its IT system.

By Press Trust of India | Updated: 11 March 2022 18:39 IST

Paytm Payments Bank was incorporated in August 2016

Highlights

Paytm Payments Bank formally began its operations in May 2017
The bank has also been directed to appoint an IT audit firm
In 2020, the RBI had barred HDFC Bank from launching new digital products

The RBI on Friday asked Paytm Payments Bank to stop opening new accounts amid "material supervisory concerns" observed in the bank.

"Reserve Bank of India has today, in 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," the central bank said in a statement.

The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

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"Onboarding of new customers by Paytm Payments Bank will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank," it said.

Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida.

In December 2020, the RBI had barred HDFC Bank from launching any new digital products or services and issuing new credit cards till the lender resolved recurring tech issues.

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