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

The RBI on Friday requested Paytm Payments Bank to cease opening new accounts amid “material supervisory concerns” noticed within the financial institution.

“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 financial institution mentioned in a press release.

The financial institution has additionally been directed to nominate an IT audit agency to conduct a complete system audit of its IT system.

“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 mentioned.

Paytm Payments Bank was integrated in August 2016 and formally started its operations in Could 2017 from a department in Noida.

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

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