Paytm Payments Bank receives RBI observations on IT reports: More than six months after being asked to pause onboarding new customers, Paytm Payments Bank (PPBL) management has received an RBI-mandated IT auditors report and the central bank’s observation on it. According to the preliminary assessment conducted by the bank management team, the observations revolve primarily around the continued strengthening of IT outsourcing processes and operational risk management.
The fintech firm also stated that it does not know when it will be permitted to resume onboarding new customers. It maintained, however, that the measures imposed on PPBL will have no material impact on Paytm’s overall business.
What is Payments Bank?
- The creation of a “Payments Bank” to serve low-income individuals and small businesses were suggested by a committee led by Dr. Nachiket.
- A payments bank, such as Airtel Payments Bank, India Post Payments Bank, etc., functions similarly to a regular bank but on a smaller or more constrained scale.
- With the Payments Bank, there is no credit risk. The majority of banking tasks can be completed by it, but it cannot make loan advances or issue credit cards.
- Only demand deposits—savings and current accounts—can be accepted; time deposits are not permitted.
- Subsidiaries cannot be established by Payment Banks to provide non-banking financial services.
About Paytm Payments Bank (PPBL)
- Paytm Payments Bank (PPBL) is an Indian payments bank headquartered in Noida that was founded in 2015. The Reserve Bank of India granted it a license to operate a payments bank the same year, and it began operations in November 2017. The RBI granted the bank scheduled bank status in 2021.
- Paytm Payments Bank is India’s first mobile-first bank, with no minimum balance and no digital transaction fees. Paytm Payment Bank provides a Paytm wallet and Paytm Savings bank account.
- Vijay Shekhar Sharma owns 51% of the company, while One97 Communications Limited owns the remaining 49%. Paytm Payments Bank is promoted by Vijay Shekhar Sharma.
- The Reserve Bank of India, which also serves as the country’s central bank and regulatory agency, governs the Indian banking system.
- It is owned by the Ministry of Finance, Government of India.
- It began operations on April 1, 1935, in compliance with the Reserve Bank of India Act, of 1934.
- Founded on April 1, 1935
- Shaktikanta Das is the Governor of RBI