Paytm tumbles after RBI forbids Paytm Payments Bank from onboarding new customers

14 Mar 2022 , 09:38 AM

The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

Onboarding of new customers by Paytm Payments Bank will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors.

This action is based on certain material supervisory concerns observed in the bank,? the RBI said in a statement.

Paytm Payments Bank is one of the payment instruments of Paytm.

In a statement issue to the bourses late of Saturday, One 97 Communications said that Paytm Payments Bank (PPBL) is taking immediate steps to comply with RBI directions, including appointment of a reputed external auditor to conduct a comprehensive System Audit of its IT systems. PPBL remains committed to working with the regulator to address their concerns as quickly as possible.

Paytm said that it has been informed that this does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments.

New users can also sign up on the Paytm app, and transact by a) creating UPI handles and linking them to their bank accounts, or b) by using third party payment instruments, for transactions on the Paytm app. Users can not, until further notice, sign up for new PPBL wallets or PPBL savings or current accounts. Paytm believes that the measures imposed upon PPBL will not materially impact Paytms overall business.

Paytm is one the largest payments platform in India based on the number of consumers, number of merchants, number of transactions and revenue ended March 2021. The company launched Paytm in 2009, as a mobile-first digital payments platform to enable cashless payments for customers giving them the power to make payments from their mobile phones. It started with bill payments and mobile top-ups as the first use cases, and Paytm Wallet as the first Paytm Payment Instrument.

One 97 Communications (Paytm) reported a consolidated net loss of Rs 778.50 crore in Q3 December 2021, higher than net loss of Rs 535.50 crore in Q3 December 2020. Consolidated net sales jumped 88.6% to Rs 1,456.10 crore in Q3 December 2021 over Rs 772 crore in Q3 December 2020.

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