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RBI tells Paytm Payments Bank to stop opening new accounts View in Punjabi

By Jasleen Kaur -- March 11, 2022 7:06 pm -- Updated:March 11, 2022 7:06 pm

Mumbai, March 11: The Reserve Bank of India on Friday directed Paytm Payments Bank to stop opening new accounts over material supervisory concerns observed in the bank. The RBI, however, did not provide any details. The stricture has been imposed under  Section 35A of the Banking Regulation Act.

“The Reserve Bank of India has today, in 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 central bank said in a statement.

The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

RBI tells Paytm Payments Bank to stop opening new accounts

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

Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida. In December 2020, the RBI had barred HDFC Bank from launching any new digital products or services and issuing new credit cards till the lender resolved recurring tech issues.

RBI tells Paytm Payments Bank to stop opening new accounts

In August 2018, the RBI had taken a similar action against Paytm Payments Bank. At the time, the regulator had cited flouting of know your customer norms.

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RBI tells Paytm Payments Bank to stop opening new accounts

-PTC News with inputs from agencies

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