The Reserve Bank of India has imposed new restrictions on Paytm’s payments bank, which processes transactions for financial services giant Paytm, It is prohibited from providing a variety of services to banks, including accepting deposits, credit transactions, storing value in customer accounts, prepaid instruments and wallets After February 29th.
The Reserve Bank of India on Wednesday ordered Paytm payments bank to stop accepting new customer accounts in 2022. The RBI said a comprehensive audit by external auditors found “ongoing” irregularities and “ongoing significant supervisory issues” at the bank.
The Reserve Bank of India has also directed Paytm’s parent companies One97 Communications and Paytm Payments Services Terminate their node account The Reserve Bank of India said customers can continue to withdraw funds from their accounts “at the earliest.” According to initial assessments by industry executives, without node accounts, Paytm may have to shift much of its business to other banks.
Payment banks will also not be allowed to provide credit transactions, including through wallets, the Reserve Bank of India said.
In 2022, the Reserve Bank of India penalized Noida-based Paytm Payments Bank after it found that it had violated regulations by allowing data to flow to servers outside India and not properly authenticating its customers.
Stay tuned for more content.