Growing pains: RBI orders a stop to Paytm service

The growth of Paytm has been exponential as it achieved an annual run rate of 5 billion digital transactions and $ 50 billion GTV (Gross Transaction Value) in July 2018. Paytm is also the largest contributor to all forms of digital payments including UPI, Wallet and Cards since January 2018.

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Growing pains: RBI orders a stop to Paytm service

However, RBI has ordered Paytm Payments Bank to stop the enrolment of new customers on its platform without any further delay. The audit issued by RBI has made a few observations regarding the process that the company undergoes to acquire new users. Not only this, Paytm Payments Bank’s adherence to KYC (Know-Your-Customer) compliance is also being questioned.

According to reports, Paytm is not being upfront regarding the whole situation, and is, apparently, trying to cover up the matter.

Renu Satti has been removed as chief executive officer of the Paytm payments bank. RBI felt that she did not have enough capability to lead a banking services firm. According to the Reserve Bank of India, one has to be a banker before they can become the Chief Executive of any Payments bank.

RBI is sceptical regarding the security mechanism used by the platform to keep its customers’ data. Moreover, Paytm Payments Bank has been asked to move to a different office instead of residing in the same office as that of One97 Communications Ltd. Following the instructions, the organization recently shifted its Payments bank to a different office located in Noida.

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