RBI directs PPBL to temporarily stop onboarding new customersPAYTM - 576 Change: 21.75 (3.93 %)
News: The Reserve Bank of India (RBI) has barred Paytm Payments Bank (Paytm PB) from onboarding new customers with immediate effect because of certain supervisory concerns. Furthermore, the banking regulator has directed Paytm PB to appoint an IT audit firm for conducting a comprehensive system audit of its IT system. Paytm PB will need specific permission from the RBI to restart the onboarding of customers following a review of the audit. Paytm has said that, Paytm Payments Bank (PPBL), was taking immediate steps to comply with RBI directions and was looking to appoint a reputed external auditor to conduct a comprehensive systems audit of its IT systems.
Views:We believe this embargo will have adverse impact on onboarding new customers for wallet, savings/current account. The ban on customer acquisition shall cripple business growth for Paytm PB, which is targeting to add half a billion customers to its fold. Also, it may defer PPBL’s plan to apply for conversion into small finance bank.