Paytm Payments Bank receives RBI observations on IT report

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Paytm Payments Bank (PPBL) management has received an RBI-mandated IT auditors report and the central bank’s observation on it, more than six months after it was asked to pause onboarding new customers.

“As per the preliminary assessment carried out by the bank management team of the above, we are informed that the observations are largely around the continued strengthening of IT outsourcing processes and operational risk management,” Paytm said in its Q2 earnings report.

The payments bank is a joint venture between Paytm, which owns a 49 percent stake in the company, and Vijay Shekhar Sharma, who holds 51 percent.

“The bank management is in the process of responding back to the RBI and will wait for further discussions/directions from the regulator,” it added.

The fintech firm also said it cannot share a timeline on when it would be permitted to resume onboarding new customers. However, it maintained that the measures imposed upon PPBL will not materially impact Paytm’s overall business.

Meanwhile, Paytm has posted a consolidated loss of Rs 571.5 crore for the quarter ended September FY23, widening from a loss of Rs 473.5 crore recorded in the same period last year. However, the loss narrowed from Rs 645.4 crore registered in Q1FY23.

Consolidated revenue from operations for the quarter at Rs 1,914 crore increased by 76.2 percent over the corresponding period last fiscal. The sequential increase in the top line was 14 percent.

The top-line growth was driven by an increase in merchant subscription revenues, growth in bill payments due to growing MTU (monthly transaction user) and growth in disbursements of loans through the platform, Paytm said in its BSE filing on November 7.