Paytm payments bank stops enrolling new users after RBI concerns

Paytm stopped enrolling new customers on June 20 following an audit by the Reserve Bank of India, which made certain observations about the process the company follows in acquiring new customers and its adherence to know-your-customer (KYC) norms, sources said.

India’s largest payments bank Paytm has stopped enrolment of new customers on its platform following observations made by the banking regulator, four people with knowledge of the matter said.

Employees work at their desks at the One97 Communications Ltd. headquarters in Noida, Uttar Pradesh, India, on Thursday, May 14, 2015. One97, which operates PayTM, think they have an edge as the country is now in the midst of a smartphone boom, and younger Indians are shunning branches and turning to apps for their banking needs, mirroring global trends. Photographer: Kuni Takahashi/Bloomberg(Bloomberg)

Paytm stopped enrolling new customers on June 20 following an audit by the Reserve Bank of India (RBI), which made certain observations about the process the company follows in acquiring new customers and its adherence to know-your-customer (KYC) norms, three of the four people said, requesting anonymity.

“RBI has directed Paytm payments bank to stop onboarding of new customers with immediate effect,” said one of the four people. Another person, a company executive, said that Paytm is modifying its “account opening process to introduce ‘current accounts’ due to which new account creation process has been paused”.

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