The Reserve Bank of India (RBI) has given a big blow to Paytm Payments Bank Ltd. The central bank has banned the company from adding new customers. This means that Paytm Payments Bank will no longer be able to add new customers. Let us tell you that the company’s founder Vijay Shekhar Sharma is a 51 percent stakeholder in Paytm Payments Bank.
What is the reason: RBI has given this order on the basis of some concerns related to material supervisory. The central bank has taken this action under section 35A of the Banking Regulation Act, 1949. Along with this, an order has been given to conduct IT audit. This will allow the obvious reasons for the flaws to be guessed. Addition of new customers will be allowed only after review of the reports of IT audit.
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Established in August 2016, Paytm Payments Bank commenced operations in May 2017. It had opened its first branch in Noida. Paytm Payments Bank received RBI nod to operate as a “scheduled payments bank” in December 2021, helping it expand its financial services operations.