The Reserve Bank of India on Wednesday restricted Paytm Payments Bank Ltd from taking fresh deposits and credit transactions across its services, due to non-compliance of regulations and supervisory concerns.
An audit report revealed “persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” the central bank said in a release.
Paytm Payments Bank will not be allowed to take further deposits in any customer accounts after February 29, the RBI said.
It added that no credit transactions will be allowed either, including via wallets.
The withdrawal or utilisation of balances by its customers will be permitted without restrictions, the central bank said.
Last month, One 97 Communications, parent of Paytm, confirmed a “slight reduction” in its workforce on Monday as part of cost-cutting measures without specifying the number of jobs.
A company spokesperson, however, denied media reports at that time that suggested the non-bank lender could cut more than 1,000 roles.
“We will be able to save 10-15 percent in employee costs as Artificial Intelligence (AI) has delivered more than we expected it to,” the spokesperson had told Reuters.
During its fiscal year to end-March 2023, Paytm had an average of 32,798 directly employed staff and 1,589 contracted employees worldwide across its various units, its annual report showed.
In August 2023, Paytm Chairman Vijay Shekhar Sharma said he would buy a 10.3 percent stake worth $628 million (roughly Rs. 5,195 crore) in the firm he founded from an arm of Chinese fintech giant Ant Financial in a deal that would make him its single largest shareholder.
© Thomson Reuters 2024