Paytm violated KYC rules, RBI reveals reason for blocking payments bank biz

Paytm violated KYC rules, RBI reveals reason for blocking payments bank biz

The Reserve Bank of India (RBI) has revealed that Paytm was in violation of know-your-customer (KYC) rules while on-boarding users for its payments bank business for which it was banned from opening new accounts and e-wallets in August, The Times of India reported.

In an RTI reply, the RBI revealed the payments bank failed to maintain the prescribed net worth limit of Rs 1 billion and also violated the end-of-the-day Rs 100,000 limit per account.

Payments banks are not allowed to hold more than Rs 100,000 in each account.

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The RBI also expressed unhappiness at the close relations between Paytm founder Vijay Shekhar Sharma’s One97 Communications and the entity that runs Paytm Payments Bank (PPB).

While Sharma owns a 51% stake, the rest is owned by One97 Communications and its subsidiaries.

Payments banks are expected to maintain an arm’s length relationship with promoter group entities.

Following the RBI ban on opening new accounts and e-wallets, the bank’s then CEO Renu Satti resigned.

 

Source:- business

 

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