Taking immediate steps to comply with RBI directives: Paytm Payments Bank

New Delhi: Paytm Payments Bank on Saturday said it is taking immediate action to comply with the Reserve Bank of India’s directive that barred the company from opening new accounts amid “material supervisory concerns”.

This is the third time that Vijay Shekhar Sharma-promoted Paytm Payments Bank (PPBL) is facing action from the banking regulator since its inception in May 2017. It is prohibited from opening new accounts for the second time.

PPBL said in a statement, “We are taking immediate steps to comply with RBI’s directions. PPBL is committed to work with the regulator to address their concerns at the earliest. Once we receive RBI’s approval, If we recommend opening of new accounts after that, we will inform.” Blog.

Paytm Payments Bank was incorporated in August 2016 and formally started its operations in May 2017 from a branch in Noida. As per the last disclosed numbers, PPBL had around 64 million subscribers.

Sharma holds 51 per cent stake in Paytm Payments Bank (PPBL), while the remaining 49 per cent is with Paytm.

RBI has also directed to appoint an IT audit firm to conduct a comprehensive system audit of IT systems of PPBL.

PPBL said in the blog that existing customers can continue to operate banking and digital payment services without any interruption.

“The savings of existing users in their PPBL account, their fixed deposits with partner banks and balances held in their Paytm Wallet, FASTag or Wallet Card and UPI services are fully secure and functional.

“Any new user visiting the Paytm App can create Paytm UPI handles, and link them to their existing PPBL account or other bank accounts. However, new users may, until further notice, create a new PPBL Wallet or PPBL Savings or existing bank accounts. Cannot sign up for this account,” PPBL said.

Addressing the customers, the blog said that the bank is fully committed to maintain high standards of compliance and continues to promote digital banking services for all.

“Rest assured that your accounts are fully functional and that you can continue to enjoy our services,” PPBL said.

In June 2018, RBI prohibited PPBL from inducting new customers due to supervisory concerns. The restrictions were lifted on December 31, 2018.

The central bank had also issued a show-cause notice to the firm on July 29, 2021, stating that Paytm Payments Bank of India, while confirming the completion of the transfer to the RBI, had issued false information under the Payment and Settlement Systems Act, 2007. committed an offense under Bill Payment Operations Unit Business to PPBL by One97 Communications. Read also: Telegram gets new update, added download manager, live streaming feature

RBI had imposed a fine of Rs 1 crore on Paytm Payments Bank for this offence. Read also: Center to organize ‘Consumer Empowerment Week’ during March 14-20

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