BENGALRU:
The Reserve Bank of India has ordered Paytm Payments Bank to stop taking on new customers with immediate effect, citing “material supervisory concerns observed at the bank”.
The bank has also been instructed to appoint an audit firm to conduct a comprehensive audit of its IT system, the Reserve Bank of India said in a statement.
A press release said: “action against Paytm Payments Bank Ltd under Section 35A of the Banking Regulation Act, 1949. The RBI has today, in the exercise of its powers, inter alia, under Section 35A of the Banking Regulation Act, 1949 , directed Paytm Payments Bank Ltd will stop onboarding new customers with immediate effect.”
“The bank has also been instructed to appoint an IT audit firm to conduct a comprehensive systems audit of its IT system. The onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific authorization provided by RBI This action is based on certain material supervisory concerns observed at the bank,” the press note added.
Paytm Payments Bank was established in August 2016 and formally started operations in May 2017 from a branch in Noida.
By December 2020, the RBI had barred HDFC Bank from launching new digital products or services and issuing new credit cards until the lender resolved recurring technical issues.