The banking regulator, in perhaps one of the harshest actions on a listed banking entity in recent times, resorted to this after finding major compliance issues in the company.
The Reserve Bank of India has initiated a major disciplinary action against listed fintech major Paytm by effectively barring Paytm Payments Bank from offering all forms of banking services to its customers within a month. To subscribe please click tau.id/2iy6f and access our live channel.
On March 11, the RBI barred Paytm Payments Bank from onboarding new customers, including accepting fresh deposits and doing credit transactions after February 29. It also includes all basic payment services including Unified Payments Interface, IMPS, Aadhaar-enabled payments and bill payment transactions.
ALSO READ: CSIR’s Purple Magic on global scale
The central bank said a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.
According to RBI’s recent reports, “The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.”
To ensure customer convenience, the central bank has allowed withdrawal and utilisation of funds by customers till the time any balance is available in their Paytm Payments Bank account. However, it has asked the Noida-headquartered company to stop accepting deposits and credit transactions or any form of top-ups in its wallets.
The central bank also asked to terminate the Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. at the earliest. The RBI also directed the payments bank to settle all pipeline transaction and nodal accounts by March 15 and no further transaction shall be permitted thereafter.
