On Friday, the Reserve Bank of India (RBI) said that Paytm Payments Bank has been ordered to stop onboarding new customers with immediate effect, citing “material” supervisory concerns.
The Reserve Bank of India has ordered Paytm Payments Bank to halt onboarding new customers immediately, citing “serious supervisory problems found in the bank.” The Reserve Bank of India said in a statement that the bank has also been asked to appoint an audit company to perform a complete assessment of its IT system.
A press release said, “action against Paytm Payments Bank Ltd under section 35 A of the Banking Regulation Act, 1949. The RBI 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 bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. 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. The press note added that this action is based on certain material supervisory concerns observed in the bank,” the press note added.
Paytm Payments Bank (PPB), incorporated in August 2016, started its operations in 2017 and now has more than 25 crores of wallet accounts and 4.4 crores of savings account. The accounts together hold a cumulative deposit of ₹400 Crores. To improve their operations and number equally, PPB has appointed Sairee Chahal to the Board of Directors.
One97 Communications, the parent organisation of fintech platform Paytm, has received permission from the Securities and Exchange Board of India (SEBI) for its Rs 16,600 crore initial public offering (IPO), according to sources kept secrecy to the matter. While Rs 8,300 crore will be direct share sale, Rs 8,300 crore will be an offer for sale (OFS), where current investors can sell their shares.