The RBI has stopped Paytm Payments Bank from accepting new customers because it broke the laws by allowing data to transit to servers in other countries and failing to properly authenticate its consumers. According to a report, annual inspections by the Reserve Bank of India (RBI) discovered that the company’s servers were sharing information with China-based organisations that indirectly held an interest in Paytm Payments Bank.
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- SoftBank-backed Paytm Payments Bank was prevented from adding new customers by the central bank on Friday, citing “serious supervisory problems found in the bank.”
- The Reserve Bank of India said in a statement that the bank has also been asked to appoint an audit company to perform a complete assessment of its IT system.
- Paytm Payments Bank, on the other hand, described the allegation as “totally incorrect, erroneous, and unconfirmed,” noting that it complies entirely with RBI’s data localisation directives.
- “The Bank’s data is entirely contained within the country.” “We are firm supporters of the Digital India programme and are dedicated to advancing financial inclusion in the country,” according to the statement.
- The bank (Paytm Payments) is acting quickly in response to the RBI’s ruling. PPBL stated that it will continue to cooperate with the regulator to address their concerns as soon as feasible.
- Customers’ services will not be affected, according to the statement.
- Existing PPBL customers will be able to continue to benefit from seamless banking and digital payments services without interruption, according to the statement.
Existing users’ PPBL savings, fixed deposits with linked banks, and balances in their Paytm Wallet, FASTag or Wallet Card, and UPI services are all safe and working, according to the company.