Paytm's Chief Executive Officer Vijay Shekhar Sharma, who is also the majority shareholder in Paytm Payments Bank, on March 14 denied a report which alleged that the lender allowed data to be leaked to Chinese firms.
"Absolutely false. The report is completely factually wrong. It is false to assume that the bank is sharing any data with Chinese or any other foreign entities," Sharma said in an exclusive conversation with CNBC-TV18.
The Paytm CEO's response came shortly after a Bloomberg report, citing sources, claimed that the Reserve Bank of India (RBI) has, in its letter sent to the lender, barred it from onboarding new customers due to the leak of data to Chinese entities.
"Annual inspections by the Reserve Bank of India found that the company’s servers were sharing information with China-based entities that indirectly own a stake in Paytm Payments Bank," the report said, citing an anonymous source.
According to Sharma, the RBI has raised same concerns but made no mention of any purported data leak to foreign entities. "The RBI in its letter did not raise concern over any leak of data to any entity outside of India...We have no server that is outside India, and no foreign national has any access to our servers," he told CNBC TV18.
The RBI has not issued a statement over the controversy which has erupted over its letter sent to Paytm Payments Bank on March 11.
The Bloomberg report, while claiming that the RBI has barred the lender from taking on new customers, also said that the regulator has raised questions over the failure of verifying the customers through KYC norms.
Sharma refrained from elaborating the "concerns" spelled out by the RBI in its letter, but claimed that UPI onboarding on Paytm Payments Bank has not been restricted.
Apart from Sharma's comments on the matter, the bank also issued a clarification.
“The recent Bloomberg report on Paytm Payments Bank claiming data leak to Chinese firms is completely false and simply sensationalizing. Paytm Payments Bank is proud to be a completely homegrown bank and is fully compliant with RBI’s directions on data localisation. All of the Bank’s data resides within the country. We are true believers of the Digital India initiative, and remain committed to driving financial inclusion in the country," the lender's spokesperson said.
Notably, the lender is a joint venture between Paytm, which owns 49 percent stake and Sharma who holds 51 percent. According to exchange filings, China’s e-commerce major Alibaba Group and its affiliate, Jack Ma’s Ant Group, own shares in Paytm.
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