The Reserve Bank of India has barred Vijay Shekhar Sharma-led Paytm Payments Bank Ltd from onboarding new customers with immediate effect. The apex bank cited “material supervisory concerns observed in the bank” for its action.
RBI has also directed the bank to appoint an audit firm to conduct a comprehensive audit 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 report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” the press note added.
Paytm Payments Bank had earlier said it received over 926 million UPI transactions in December, becoming the first beneficiary bank in the country to achieve this landmark. In the October to December 2021 quarter, Paytm Payments Bank had registered a total of 2,507.47 million beneficiary transactions, compared to 964.95 million in the same quarter in 2020. This is a year-on-year increase of 159.85 per cent.