The Reserve Bank of India has directed Paytm Payments Bank to stop with immediate effect the onboarding of new customers.
PayTM considers itself to be one of the largest enablers of digital payments in the country. It is also the extensive issuer of Fastags, and is the biggest beneficiary bank for UPI transactions.
“The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system,” the RBI said on Friday, adding that the action is based on certain material supervisory concerns observed in the bank.
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, it further said.
According to sources, the RBI had found various deficiencies with the bank in the past as well. A recent supervisory inspection at Paytm Payments Bank found more such lacunae with regard to KYC and customer onboarding. “Problems persisted despite repeated assurances from the bank and so the RBI took such an action,” the sources said.
The reasons for the decision taken not disclosed by RBI.
