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Bengaluru: The Reserve Bank of India (RBI) said on Friday it has directed Paytm Payments Bank to stop taking on new customers with immediate effect, citing “material” supervisory concerns observed in the bank.
The bank has also been directed to appoint an audit firm to conduct a comprehensive audit of its IT system, the Reserve Bank of India (RBI) said in a statement.
Action against Paytm Payments Bank Ltd under section 35 A of the Banking Regulation Act, 1949https://t.co/tqWfwt7mT3
— ReserveBankOfIndia (@RBI) March 11, 2022
Paytm Payments Bank would be able to onboard new customers subject to specific permission from the RBI after reviewing the IT auditor’s report.
It had received RBI‘s approval to function as a scheduled payments bank in December, helping it expand its financial services operations.
Billionaire Vijay Shekhar Sharma, founder of payments firm Paytm, owns 51% of Paytm Payments Bank.
The move comes months after One97 Communications, the payments bank’s parent, saw a dramatically underwhelming listing amid concerns around the company’s valuation.