All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag and bank accounts can continue to use these instruments, including debit cards and online banking, for payments, according to One97 Communications.
Paytm Payments Bank was incorporated in August 2016 and officially started operations in May 2017 from a branch in Noida.
The Reserve Bank of India (RBI) order on Paytm Payments Bank has raised some questions among its customers. Allaying any apprehensions, Paytm’s parent company, One97 Communications, said the RBI order does not affect any existing Paytm Payments Bank (PPBL) customers.
Last week, the RBI ordered Paytm Payments Bank-promoted Vijay Shekhar Sharma to stop opening new accounts amid “significant oversight concerns” seen at the bank.
RBI ORDER TO PAYTM PAYMENT BANK
“The Reserve Bank of India has today, in the exercise of its powers, particularly under Section 35A of the Banking Regulation Act 1949, ordered Paytm Payments Bank Ltd to stop, with immediate effect , onboarding new customers,” the central bank said. in a report.
The bank has also been instructed to appoint an IT audit firm to carry out a comprehensive audit of its IT system.
“The onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific authorization granted by RBI after review of reports from IT auditors. This action is based on certain significant oversight concerns observed in the bank,” he said. declared.
- This is the third time that Paytm Payments Bank has come under action from the banking regulator since its inception in May 2017. It was banned from opening new accounts for the second time, according to a report of the PTI.
- Paytm Payments Bank was incorporated in August 2016 and officially started operations in May 2017 from a branch in Noida. According to the latest leaked figures, PPBL had about 6.4 crore customers.
- The RBI had also in June 2018 banned PPBL from onboarding new clients due to oversight concerns. The restrictions were lifted on December 31, 2018.
- The central bank had also issued a show cause notice to the company dated July 29, 2021, stating that Paytm Payments Bank had committed an offense under the Payments and Settlement Systems Act 2007 by submitting false information to RBI confirming completion of Bharat’s transfer. Bill Payment Operating Unit activity by One97 Communications at PPBL.
- The RBI had imposed a fine of Rs 1 crore on Paytm Payments Bank for the breach.
- Sharma owns a 51% stake in Paytm Payments Bank (PPBL), while the remaining 49% is held by One97 Communications.
- China-based Alibaba Group is the largest shareholder in One97 Communications with around 31% stake through its subsidiaries.
BEST POINTS FOR CUSTOMERS
- The company would like to reiterate that this does not affect any existing PPBL customers, who can continue to use all banking and payment services without interruption, One97 Communications said in a BSE filing.
- All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag and bank accounts can continue to use these instruments, including debit cards and online banking, for payments, according to One97 Communications.
- New users can also register on the Paytm app and transact by creating UPI IDs and linking them to their bank accounts, or using third-party payment instruments, for transactions on the Paytm app, a said the company.
- However, users cannot, until further notice, register for new PPBL wallets or PPBL savings or current accounts.
NO DATA LEAKAGE
Paytm Payments Bank said on Monday that it is fully compliant with the Reserve Bank of India’s data localization rules and that all bank data resides in the country.
Paytm investors in India do not have access to its payment bank’s customer data, CEO Vijay Shekhar Sharma told Reuters while seeking to allay concerns over reports of user data leaks to Chinese companies.
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