The Reserve Bank of India (RBI) on Friday stopped Paytm Payments Bank from onboarding any new customers. In an official release, the RBI also directed ordered that the bank has to appoint an audit firm to conduct a comprehensive System Audit of its IT system.
"Reserve Bank of India has today, in the exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers," the RBI stated.
Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing the report of the IT auditors, the release read further.
This action is based on certain material supervisory concerns observed in the bank.
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