I for one have used India’s leading financial service, paytm on a regular basis.. but why was there a ban imposed by RBI on it?
Let me tell you why! The RBI in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, has banned paytm from onboarding new users after its servers were found sharing information with China-based entities that indirectly own stakes in the fintech giant’s unit, India’s central bank would set the terms of reference for an independent technology audit of Paytm Payments Bank for alleged violations of customer acquisition and privacy rules that may have included possible data flow to companies of Chinese origin Founder Vijay Shekhar Sharma denied a media report that alleged data sharing with Chinese entities may have led to the regulatory curb.
The payments bank did not plug the gaps in the system even after repeated relevant references by the regulator. There were consistent deficiencies found in the bank’s KYC process, like accounts that needed a full KYC were not done, Data from the payments bank was also flowing to the wallet operator, which was not quite a watertight compartment and against central bank rules. All in all, compliance was either pending, or unsatisfactory.
Mr. Vishal Shekhar has tried to clear air about this ongoing impediment stating that there is absolutely no observation input or comment related to the data access or sharing. He goes on saying that the news is illogical, and no factual references have been made so far.
The RBI had imposed a penalty of Rs 1 crore on Paytm Payments Bank for the offence. The latest RBI action comes at a time when Paytm was eyeing to upgrade its payments bank to a small finance bank licence, after completing five years of operation in May this year. Paytm share crash at 13% post RBI
This sums up to just one question. How secure are our accounts? Such timely intervention by the RBI keeps us hoping that our information will remain protected. This is one Chinese flavour we would find hard to digest. Does such breaking news keep you on edge? Then do subscribe to Channel I’m . more such stories lined up for news lovers at Channel I’m. till we meet again .. this is ( name ) signing off.
