Paytm Payments Bank Ltd (PPBL) has suffered a major blow as the RBI forbade it from taking deposits or top-ups in any user account, prepaid device, wallet, or FASTag after February 29, 2024. As a result of the RBI’s January 31 action, PPBL was required to stop taking deposits or top-ups in any client wallets, FASTTags, accounts, or other instruments after February 29.
After receiving a thorough system audit report and a compliance validation report from external auditors, the RBI decided to take action against PPBL. These reports revealed ongoing substantial supervisory issues and non-compliances at PPBL, which prompted more supervisory action.
Governor of the Reserve Bank of India Shaktikanta Das has said that there isn’t much room to go back and review the actions taken against Paytm Payments Bank. Das reaffirmed that the central bank only takes action against regulated firms after carrying out a comprehensive examination while speaking to the media in New Delhi. He underlined the RBI’s dedication to fostering the fintech industry while safeguarding the interests of clients and upholding financial stability.
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A PTI report claims that the government is presently investigating Chinese foreign direct investments in the fintech company’s payment aggregator subsidiary. Chinese investments in Paytm Payments Services Ltd., which is requesting an RBI license to function as a payment aggregator, are the main subject of interest.
A Paytm representative informed PTI that PPSL had submitted an application for an online Payment Aggregator (PA) license for online retailers. The regulator then requested that PPSL resubmit the application and secure the required authorization for earlier downward investments. The representative confirmed that PPSL followed all applicable regulations and gave the regulator the necessary paperwork on schedule. The spokesman also made it clear that although there have been changes to the ownership structure, the founder of Paytm is still the company’s largest investor.
In July 2023, Ant Financial withdrew its investment of OCL to less than 10%, so disqualifying itself from beneficial company ownership. The original OCL promoter currently owns a 24.3% share. As a result, the spokesman said that PPSL’s interpretation of Chinese FDI is false and deceptive.
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