Paytm Payments Bank gears up for immediate steps to comply with RBI directions

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Paytm Payments Bank on March 12 said it was taking immediate steps to comply with RBI directions after the regulator barred the company from onboarding new customers.

“Paytm Payments Bank remains committed to working with the regulator to address their concerns as quickly as possible. We shall notify when we recommence the opening of new accounts after obtaining RBI approval,” the lender said in a statement late Saturday.

New customers, however, will not be able to open current or savings accounts with the lender. They will also not be able to open the Paytm Payments Bank wallet, the lender said.

Further, new users operating the Paytm app can create Paytm UPI handles and link them to their existing payments bank account or to other bank accounts.

For existing customers, fixed deposits with the lender and other partnered banks, the balance maintained in their Paytm Wallet, FASTag, or Wallet Card and UPI services are completely safe and functional, the lender said. Payments banks have an upper limit of Rs 2 lakh per deposit account and cannot lend. Paytm Payments Bank partners with lenders to extend loans and gather deposits of over Rs 2 lakh.

“The bank remains fully committed to maintaining high standards of compliance and continues to promote digital banking services for all. Rest assured your accounts are fully functional and you can continue to enjoy our services,” it said.

The statement comes a day after the central bank directed the Vijay Shekhar Sharma-promoted bank to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. “This action is based on certain material supervisory concerns observed in the bank," the regulator had said.

While the Fintech giant has said it will comply with RBI directions immediately, experts said the onboarding of new customers altogether will likely hurt Paytm Payments Banks’ growth plans.

Moneycontrol on March 9 reported that Paytm Payments Bank will likely approach the RBI for a Small Finance Bank licence by June.