Supervisory motion towards Paytm Payments Bank ‘not yet complete’: RBI

The supervisory motion by the Reserve Bank of India (RBI) towards Paytm Payments Bank, which led to the banking regulator suspending the funds financial institution from onboarding any new clients, is “not yet complete”, the RBI stated in response to a Right to Information (RTI) software filed by The Indian Express.

The banking sector regulator, in an order dated March 11, had directed the Vijay Shekhar Sharma-led funds financial institution to cease including new clients with fast impact whereas additionally asking it to nominate an IT audit agency to conduct a complete audit of the IT system of the funds financial institution.

At the time, the central financial institution had stated that onboarding of recent clients by Paytm Payments Bank can be topic to “specific permission to be granted by RBI after reviewing a report of the IT auditors”. On April 4, the Finance Ministry advised the Parliament that it was knowledgeable by the RBI that Paytm Payments Bank had not appointed an audit agency for the audit of its IT methods.

“It is informed that the supervisory process/action in the (Paytm Payments Bank) matter is not yet complete,” the central financial institution stated within the RTI response to a query on the explanations behind RBI’s order. Following the RBI’s order on March 11, information studies claimed that the suspension was on account of Paytm Payments Bank sharing info with Chinese entities that not directly personal a stake within the funds financial institution. The funds financial institution is a joint-venture between Paytm and its founder Vijay Shekhar Sharma. Paytm, mum or dad firm of which One 97 Communications Ltd is a listed entity, has shareholding by China’s Alibaba Group and its associates.

Paytm Payments Bank had denied these studies and stated that it was “fully compliant with RBI’s directions on data localisation”. “All of the Bank’s data resides within India,” it added.

Separately, on RBI suspending onboarding of recent customers on the funds financial institution, it had stated that it was “taking immediate steps to comply with RBI directions, including appointment of a reputed external auditor to conduct a comprehensive system audit of IT systems”. “Any new users coming to the Paytm app can create Paytm UPI handles, and link them to their existing PPBL account or to other bank accounts. However, new users cannot, until further notice, sign up for new PPBL wallets or PPBL savings or current account,” it had stated.