The Reserve Bank of India (RBI) on Friday directed Paytm Payments Bank Ltd to stop adding customers.
The bank has been asked to follow these directions with immediate effect and appoint an IT audit firm to conduct a comprehensive system audit of its IT system.
In doing so, the RBI had exercised its powers under section 35A of the Banking Regulation Act, 1949.
” Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” the RBI said in a statement.
Paytm Payments Bank received RBI’s approval to function as a scheduled payments bank in December.
Billionaire Vijay Shekhar Sharma, the founder of payments firm Paytm, owns 51 per cent of Paytm Payments Bank.