RBI’s Big Action On Paytm Payments Bank
RBI’s big action on Paytm Payments Bank, ban on adding new customers; Know the whole matter.
There has been a big action on Paytm Payments Bank. The Reserve Bank of India (RBI) has directed Paytm Payments Bank Ltd to stop adding new customers.
This prohibition is applicable with immediate effect. The bank has also been asked to appoint an IT audit firm to conduct a comprehensive audit of its IT systems.
Big action under the Banking Regulation Act.
Explain that RBI has taken this action under Section 35A of the Banking Regulation Act, 1949. Paytm has been asked to first get its IT system audited. New customers will be added only if RBI allows it.
RBI’s big action on Paytm Payments Bank: RBI will think after the IT audit.
RBI has said that it will make a decision in this regard only after seeing the report of the IT audit. RBI has taken this action after the bank’s supervisory concern was raised.
Paytm Payments Bank working since August 2016.
Paytm Payments Bank was incorporated in August 2016 and formally became operational in May 2017 from a branch in Noida.
The central bank imposed a fine of 1 crore.
The Reserve Bank had imposed a penalty of Rs 1 crore on Paytm Payments Bank Limited (PPBL).
RBI had said that on examination of PPBL’s application for issue of Final Authorization Certificate (CoA), it was found that it had furnished information that did not reflect a factual position.
Subsequently, the central bank, by an order dated October 1, 2021, imposed a penalty of Rs 1 crore on PPBL.
The action was also taken on HDFC Bank.
In December 2020, the RBI barred HDFC Bank from launching any new digital products or services and issuing new credit cards until the lender resolves recurring tech issues.
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