The Reserve Bank of India (RBI) asked Paytm Payments Bank Ltd on Friday to halt new client onboarding immediately and perform a complete examination of its IT infrastructure, citing “material supervisory concerns.”
Paytm Payments Bank’s onboarding of new customers would be subject to particular clearance from the RBI, which will be provided after examining the IT auditors’ report, according to the RBI.
The central bank stated, “This action is based on several material supervisory concerns found in the bank.”
“The RBI has today, in execution of its powers under Section 35A of the Banking Regulation Act, 1949, asked Paytm Payments Bank to halt new client onboarding with immediate effect,” it added. In addition, the bank has been required to appoint an IT auditor to conduct a comprehensive System Audit of its IT system, the RBI said.
The central bank stated, “This action is based on several material supervisory concerns found in the bank.” Paytm Payments Bank was approved by the RBI in 2017.
According to Paytm’s IPO prospectus, for the fiscal year ending March 31,2021, Paytm Payments Bank, which has the greatest size among all payment banks, earned a net profit of Rs 17.88 crore on sales of Rs 1,987.84 crore. One97 Communications controls 49 percent of Paytm Payments Bank, while Vijay Shekhar Sharma owns the remaining 51 percent.