The Reserve Bank of India on Friday bought Paytm Payments Bank Ltd. ordered to stop onboarding new clients immediately, citing “certain material regulatory concerns observed at the bank”. The RBI said it was exercising its powers under Section 35A of the Banking Regulations Act 1949 to order the action against the payment bank. “The bank was also instructed to engage an IT audit firm to conduct a comprehensive system audit of its IT system,” RBI said in a statement on its website.
“The onboarding of new customers by Paytm Payments Bank Ltd. is subject to special approval issued by RBI after reviewing the IT auditors’ report,” the central bank added. The banking unit of digital payments operator Paytm, which is backed by China’s Ant Group and Japan’s SoftBank, provides services to more than 300 million wallets and 60 million accounts, according to information on its website.