RBI notifies Paytm Payments Bank to discontinue adding novel clients with immediate effect

Paytm Payments Bank has put a stop to enrol novel clients on its platform accompanying observations made by RBI.

The third declaration has been made by people acquainted with the matter.

Paytm ceased enrolling novel clients on 20 June after an audit by the central bank that made certain observations about the procedure the company follows in obtaining new clients and its adherence to know-your-customer (KYC) rules, three of the four sources stated, requesting secrecy.

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One of the four people stated, “RBI has directed Paytm Payments Bank to stop onboarding of new customers with immediate effect.”

Another person, a company managerial, stated that Paytm is amending its “Account opening procedure to introduce ‘current accounts’ because of which new account creation method has been paused."

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Paytm was also ordered to get rid of Renu Satti as payments bank’s chief executive accompanying RBI’s doubts about her aptitude to guide banking services company, started the third of the four people quoted previously.

RBI needs an individual to be a banker with the intention to become the chief executive of a payments bank.

But a Paytm representative stated, “This is incorrect... Renu Satti’s appointment was made on 19th May 2017 vide an official approval from RBI.”

In a statement, Paytm stated Satti had resigned from her place as Paytm Payments Bank chief executive officer to undertake a new position in the company. She will be heading the new retail biz at Paytm as its COO.

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The place of Paytm payment bank’s CEO Paytm is still vacant. The representative did not remark on whether Paytm has been told to prevent enrolling novel clients.

RBI also examined that Paytm must have enhanced security methods to store client info and asked Paytm Payments Bank to have an office separate from that of One97 Communications Ltd.

In recent times, the firm shifted its Paytm Payments squad to a new office in Noida.

A query forwarded to RBI remained unanswered as of Tuesday night.

by Vijay Singh | Wed, Aug 01 - 01:08 PM

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