Paytm Payments Bank yet to appoint firm for IT audit, government tells Lok Sabha

Vijay Shekhar Sharma, Chief Executive Officer of Paytm

Paytm Payments Bank is yet to appoint a firm to conduct an audit of its information technology (IT) systems, the finance ministry has told Parliament.

"The RBI (Reserve Bank of India) has further informed that the Paytm Payments Bank Limited has not yet appointed the IT audit firm to conduct a comprehensive System Audit of the IT system of the bank," Minister of State for Finance Bhagwat Karad told the Lok Sabha in a written reply to a question on April 4.

On March 11, the RBI barred Paytm Payments Bank from onboarding new customers and ordered it to appoint a firm to conduct a "comprehensive System Audit of its IT system".

"Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing a report of the IT auditors," the central bank had said.

The day after the RBI's order, Paytm Payments Bank had said it was taking immediate steps to comply with the directions, however, nearly a month later, it is yet to do so.

While the RBI did not mention the reasons for the directions given to Paytm Payments Bank, Bloomberg reported, citing sources, that the action followed a leak of data to Chinese entities. According to the report, the RBI had found in its annual inspections that Paytm Payments Bank's servers were sharing information with China-based entities that indirectly own a stake in the bank.

However, Vijay Shekhar Sharma, Paytm's chief executive officer, had denied the claim, saying the report was "absolutely false" and "completely factually wrong".

"It is false to assume that the bank is sharing any data with Chinese or any other foreign entities," Sharma had told CNBC-TV18.