Paytm says that restrictions on Payments Bank won’t hamper its business
- RBI barred
Paytm Payments Bankfrom opening any new account from March 11 onwards.
- One 97 Communications has emphasised that the RBI recent restrictions on
PaytmPayments Bank will have no material impact on Paytm.
- Paytm Payments Bank is a joint venture between Paytm and its founder Vijay Shekhar Sharma.
AdvertisementOne 97 Communications — the parent company of digital payments giant Paytm — has once again emphasised that the Reserve Bank of India’s (RBI) recent restrictions on Paytm Payments Bank will have no material impact on Paytm or its ability to sign up new customers on its app.
“Paytm believes that the measures imposed upon PPBL [Paytm Payments Bank Limited) will not materially impact Paytm’s overall business. This direction does not have an impact on the services that Paytm provides in partnership with other financial services institutions,” One 97 Communications said in a stock exchange filing on March 15.
Paytm Payments Bank is a joint venture between Paytm and its founder Vijay Shekhar Sharma. It is important to note that Paytm Payments Bank is not included under the public offering of One 97 Communications, instead it is an associate entity. Even though not public, Paytm Payments Bank is the backbone behind several Paytm offerings including insurance, digital payments and lending.
RBI barred Paytm Payments Bank from opening any new account from March 11 onwards. The central bank has asked Paytm Payments Bank to carry out an independent technology audit, but only after consulting with them. The payments bank would have to select the name of potential auditors, who will then be reportedly finalised by the RBI itself.
A Bloomberg report, citing sources, said that the central bank imposed this restriction on Paytm Payments Bank as the company allowed data to flow to servers that were sharing information with China-based entities. Vijay Shekha Sharma-led One97 Communications have denied these claims, saying the report is “completely false” and “simple [sic] sensationalising”.
“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 company’s spokesperson added.
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