Paytm Payments Bank Director Resigns Amidst RBI Restrictions and Compliance Concerns

9 Feb 2024 , 11:18 AM

Manju Agarwal, an independent director at Paytm Payments Bank Limited (PPBL), resigned from its board effective February 1, 2024, in response to RBI’s restrictions on PPBL. Agarwal, a former Deputy Managing Director at SBI, had served on the PPBL board since May 2021.

On January 31, RBI imposed significant business restrictions on Paytm Payments Bank, including a ban on accepting new deposits and conducting credit transactions after February 29.

RBI’s investigation revealed major irregularities in KYC procedures, exposing customers to significant risks, with instances of a single PAN being linked to over 100 customers in some cases.

High numbers of dormant accounts and deficiencies in KYC processes raised concerns about money laundering. RBI directed PPBL to settle all pending transactions and nodal accounts by March 15, after which no further transactions would be allowed.

RBI considers canceling payment PPBL’s permit as a logical step due to repeated non-compliance with regulations, effectively ending its operations by February 29.

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