RBI bars Paytm Payments Bank from onboarding new customers

Mumbai: The Reserve Bank of India (RBI) on Friday said it has banned Paytm Payments Bank from onboarding new customers with immediate effect.

“Reserve Bank of India has today, in the 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 RBI said in a statement.

The RBI has also directed Paytm Payments Bank to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

“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,” the statement said.

“This action is based on certain material supervisory concerns observed in the bank,” the central bank added.