Shares fell 12% due to ban on new customers joining payment banks, data was shared with Chinese companies
Paytm Payments Bank has been exposed for the March 11 ban imposed by the Reserve Bank of India (RBI). The company is said to have shared data with some Chinese companies. That is why the RBI has stopped the company from adding new customers. Shares of Paytm fell 12% on Monday following the news.
A Bloomberg report says it is against Indian rules for companies to share data on servers abroad. According to the report, data sharing was mentioned in the Reserve Bank’s annual inspection report. Paytm shared the data with Chinese companies that are indirectly partners with the company.Paytm Payments Bank and its CEO Vijay Shekhar Sharma are in a joint venture. China’s Alibaba Group and its other companies are also investors. Paytm also has shares in Jack’s Ant Group.
The decision will be taken by the Reserve Bank: The Reserve Bank has also asked Paytm to appoint an audit firm and audit the IT system. After reviewing the auditors’ report, the RBI will decide whether Paytm will allow new customers to join. This is the second time the company has faced such sanctions. A similar action was taken in August 2018 alleging violation of customer rules.
Paytm Payments Bank said it made over 92.6 crore UPI transactions in December. According to Paytm’s website, they have more than 300 million wallets and 60 million bank accounts. They offer Zero Balance Savings Account, Spend Analytics, Digital Passbook, Virtual Debit Card, Fixed Deposit, Money Transfer to their customers.
Arun Jaitley inaugurated Payments Bank: In 2017, former Finance Minister Arun Jaitley inaugurated Paytm Payment Bank. Its chairman is Vijay Shekhar Sharma. Paytm opened its first branch in Noida and started a savings account. IMPS, NEFT, RTGS, UPI, FASTAG and NetBanking are provided.
Launched physical debit card in 2018 and introduced DMT, Nodal Account and NACH. In 2019, the current account facility was also launched. Video KYC facility started in Paytm Payments Bank from 2020. The bank also introduced FD on demand.In 2021, the bank launched MasterCard DC, NCMC, prepaid cards. It also received RBI approval to operate as a scheduled bank in December 2021, helping it expand its financial services operations.
