RBI takes action against Paytm Payments Bank - 'No new customers now; conduct audit'

In a big development, RBI has taken a major action against Paytm Payments Bank. 

In a press release, RBI informed about 'Action against Paytm Payments Bank Ltd under section 35 A of the Banking Regulation Act, 1949'.

'Stop, with immediate effect, onboarding of new customers'

The central bank said, "Action against Paytm Payments Bank Ltd under section 35 A of the Banking Regulation Act, 1949
Reserve Bank of India has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers."

'Conduct a comprehensive system audit' 

"The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system," the release by RBI said.

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

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