The RBI’s action against Paytm Payments Bank follows a comprehensive system audit report and subsequent compliance validation report of the external auditors
The Reserve Bank of India (RBI) has taken decisive measures by placing restrictions on the initiation of new clientele by Paytm Payments Bank, effective immediately. An official announcement made by the central banking authority also stipulated the prohibition of accepting deposits or augmentations in any patron’s account, inclusive of prepaid instruments, digital wallets, and FASTags, among other services, starting from the end of February 2024.
The RBI’s action against Paytm Payments Bank stems from an extensive audit conducted by external auditors, followed by a subsequent assessment of regulatory compliance. These evaluations unveiled persistent breaches of compliance standards and ongoing material concerns regarding supervisory matters within the bank. Consequently, the central bank deemed it necessary to escalate its supervisory measures, as indicated in an official statement. “No further monetary inflows or outgoing transactions, including top-ups, shall be sanctioned in any customer accounts, prepaid instruments, digital wallets, FASTags, NCMC cards, etc., after February 29, 2024, except for any interest disbursements, cash incentives, or reimbursements that may be credited subsequently,” the statement clarified.
Furthermore, the RBI specified that patrons of the bank are entitled to withdraw or utilize their account balances, encompassing savings and current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, without encountering any restrictions, up to the limit of their available balances. It is noteworthy that the RBI had previously instructed PPBL to cease the acquisition of new clientele with immediate effect back in March 2022.