The Reserve Bank of India on Friday ordered Paytm Payments Bank Ltd. to immediately stop onboarding new customers, citing “certain material supervisory concerns observed in the bank”. The RBI said it was exercising its powers under section 35A of the Banking Regulation Act, 1949, to order the action on the payments bank. “The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system,” the RBI said in a statement on its website.
“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,” the central bank added. The banking unit of digital payments operator Paytm, which is backed by China’s Ant Group and Japan’s SoftBank, provides services to more than 300 million wallets and 60 million accounts, according to information on its website.