According to a recent report, India’s biggest payments bank Paytm has been ordered by RBI (Reserve Bank of India) to stop enrolling new customers on its platform. The news comes after the banking regulatory performed an audit on Paytm’s process of acquiring new customers and its adherence to know-your-customer (KYC) norms.
Hindustan Times quoted four people with knowledge of the matter, one of whom stated, “RBI has directed Paytm payments bank to stop onboarding of new customers with immediate effect.” The website also mentioned a company executive saying that company is modifying its “account opening process to introduce ‘current accounts’ due to which new account creation process has been paused”. It has also been observed by RBI that Paytm needs to setup a better security mechanism to ensure safety of customer data.
While Paytm has already stopped enrolling new customers from June 20, it is also being reported that the company has asked its chief executive officer (CEO) of the payments bank, Renu Satti to step down from her position. The reason behind this is RBI’s objection of her ability to lead the format, as the banking regulatory requires a person to be a banker in order to lead the company’s payments banks platform.
However, a Paytm spokesperson seems to have denied the news, by stating that Renu Satti was initially appointed on basis of an official RBI approval. That being said, the company did announce on Friday that Renu will be stepping down from her current position, to take on the role of the chief operating officer of the company’s retail business division.
Watch: Vivo NEX First Look
Paytm Payments Bank is a separate entity from Paytm, which is owned by Vijay Shekhar Sharma and One97 Communications Ltd. With $2 billion (approximately Rs 13,710 crore) raised at its inception, the company is currently valued at over $10 billion (approximately Rs 68,545 crore) . However, the new platform has been under scrutiny of authorities, which includes RBI and Unique Identification Authority of India. Along with stopping enrollment, RBI has also demanded Paytm Payments Bank to have a separate office from the One97 Communications Ltd. The company recently moved its Paytm Payments team to a new facility in Noida.