Paytm Payments Bank has stopped adding new customers on its platform from 20 June as the Reserve Bank of India (RBI)’s made some observation after an audit regarding Paytm’s process of adding the users and its adherence to know-your-customer (KYC) norms, and directed the company to stop adding users on its platform with immediate effect, reports Livemint.
RBI also reportedly asked Paytm to sack Paytm Payments Bank CEO Renu Satti due to her “inability to lead the banking services” at the company, the report says. According to RBI norms of payments banks in India, a payments chief executive has to be a banker. We reported a day before only that Satti has resigned from her role and will now head Paytm’s ‘New Retail’ business.
Quoting a source, the publication reports that the Paytm is now modifying its account opening process, as the current process of acquiring new users is on pause. Paytm had formally launched its Payments Bank in November last year.
According to Livemint, RBI observed that Paytm has to have better security mechanisms to store customer data and it also directed the company to have a separate office for Paytm Payments Bank. The company reportedly moved its Paytm Payments team to a new facility in Noida. We have reached out to Paytm for a comment but are yet to receive a reply at the time of publication.
This is not the first time that RBI has suspended a payments bank services. Earlier, it had directed Airtel Payments bank to pause adding new users. After 10 months of suspention, Airtel received requisite approval from the RBI to enroll new customers and announced that it has been permitted by the UIDAI to resume the enrolling of customers using Aadhaar based e-KYC.