AMN / WEB DESK
The Reserve Bank of India (RBI) today prohibited Paytm Payments Bank from accepting fresh deposits and carrying out transactions from February 29 this year, citing “persistent non-compliance” and “material supervisory concerns”.
In March 2022, the regulator barred Paytm Payments Bank from taking in new customers. The company, with One97 Communications as its parent, was asked at that time to appoint an external auditor to check its information technology systems.
“The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” said RBI in its new order.
RBI mentioned that it had directed PPBL to stop onboarding of new customers with immediate effect on March 11, 2022. However, the central bank said subsequent compliance validation report by external auditors revealed “persistent non-compliance” and continued material supervisory concerns in the bank.
In exercise of its powers under section 35A of the Banking Regulation Act, RBI has directed that no further deposits and credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, and FASTags after the 29th of February, other than any interest, cashbacks, or refunds which may be credited anytime. Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, are to be permitted without any restrictions, up to their available balance. RBI added that the Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than the 29th of February.
