PayTM Payments Bank stops enrolling new customers after the RBI audit

PayTM Payments Bank is owned by Vijay Shekhar Sharma for a 51% share and One97 Communications handles the rest.

Photo courtesy: Twitter

Online payments startup PayTM’s payment bank has reportedly stopped enrolling new customers on its platform following an audit by RBI. On June 20, the company stopped new users from joining the platform after The Reserve Bank of India made observations about the way PayTM acquires new customers while adhering to the know your customer (KYC) norms.

Sources told reports that RBI directed PayTM Payments Bank to stop new customers on enrolling to their platform with immediate effect. Sources also added that the company is modifying its “account opening process to introduce ‘current accounts’ due to which new account creation process has been paused”.

Following RBI’s directions, PayTM was also asked to remove Renu Satti as chief executive of the payments bank. RBI reportedly had objections if Renu was able to lead a banking services company, and wants a banker to hold a CEO’s position at a payments bank. However, a PayTM spokesperson claimed the information to be incorrect and told reports that Renu Satti had an appointment 19th May 2017 vide an official approval from the RBI. PayTM on Friday, said in a statement that Renu had taken a new role within the company stepping down from her position as the CEO. Her new position will be the chief operating officer of the new retail business of PayTM. The CEO position of the payments bank is yet to be made.

RBI also asked PayTM payments bank to move to a separate office from One97 Communications Ltd. This change was observed after RBI noted that the company must have better security management to store the customer data. PayTM payments bank moved to a new office in Noida following the observation.

Bharti Airtel Ltd and Airtel Payments Bank Ltd. were previously barred from conducting eKYC of customers using Aadhar card by the Unique Identification Authority of India (UIDAI). UDAI is now keeping PayTM’s payment bank business under inspection.

The company’s Payments Bank services were launched in May 2017 as a mobile-first bank with no charges on any online transaction. The service offers zero balance accounts, and for the savings accounts offers an interest rate of 4% per annum. The bank’s aim is to reach 500 million bank accounts by the year 2020 after investing $500 million in KYC operations.

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