RBI stops ‘New Customers’ for Paytm Payments Bank, Orders IT Audit

RBI has taken action against Paytm Payments Bank Ltd. and has issued directions to stop ‘onboarding of new customers’ with immediate effect, till IT Audit of the Bank and review thereof is done in due course.

RBI has taken this action against Paytm Payments Bank Ltd., u/s 35 A of the Banking Regulation Act, 1949. RBI has stated in its Press Release that Paytm Payments Bank Ltd has been directed to immediately stop onboarding of new customers. Also, the bank has been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system.

RBI stops 'Onboarding of New Customers' for Paytm Payments Bank, Orders IT Audit

Now the onboarding of new customers at Paytm Payments Bank Ltd shall be subject to specific RBI approval of the RBI, post review of the IT Audit/ System Audit Report. This action is based on certain material supervisory concerns observed in the bank. KYC and IT security issues are likely to be the core concerns of the RBI, as has been witnessed in its action against many other Financial Institutions/ Banks in the recent past.

Paytm Payments Bank should take necessary steps on priority basis to comply with the RBI directions to maintain trust of new customers/ investors.

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