RBI's big action on Paytm Payments Bank, ban on adding new customers

There has been a big action on Paytm Payments Bank. The Reserve Bank of India (RBI) has directed Paytm Payments Bank Ltd 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.

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 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 was incorporated in August 2016 and formally became operational in May 2017 from a branch in Noida. 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.