There has been a big action on Paytm Payments Bank . The Reserve Bank of India ( RBI) has directed Paytm Payments Bank Limited to stop adding new customers.
This prohibition is applicable with immediate effect. The bank has also been asked to appoint an IT audit firm to conduct a comprehensive audit of its IT systems.
Big action under the Banking Regulation ActExplain that RBI has taken this action under Section 35A of the Banking Regulation Act, 1949. Paytm has been asked to first get its IT system audited. New customers will be added only if RBI allows it.
RBI will think after IT audit
RBI has said that it will take a decision in this regard only after seeing the report of IT audit. RBI has taken this action after the bank’s supervisory concern was raised.
Paytm Payments Bank working since August 2016
Paytm Payments Bank was incorporated in August 2016 and formally became operational in May 2017 from a branch in Noida.
Central bank imposed a fine of 1 crore
The Reserve Bank had imposed a penalty of Rs 1 crore on Paytm Payments Bank Limited (PPBL). RBI had said that on examination of PPBL’s application for issue of Final
Authorization Certificate (CoA), it was found that it had furnished information which did not reflect a factual position. Subsequently, the central bank, by an order dated October 1, 2021, imposed a penalty of Rs 1 crore on PPBL.
Action was also taken on HDFC Bank
In December 2020, the RBI barred HDFC Bank from launching any new digital products or services and issuing new credit cards until the lender resolves recurring tech issues.
