Paytm is one of the largest Fintech companies in India and has a market share of 13% But ever since its IPO in 2021, the company has always been in trouble this time things are tough Because RBI is one of the fathers of all banks in India has banned the Paytm Payments bank which not only ruined the reputation of Paytm but also raised the concerns about its credibility among its 100 Milion users and it also led the decline of 20% of the share price on Indian share market which led to the ultimate loses to its shareholders.
RBI launched a major crackdown on Paytm Payments bank on January 31 after observing a complete disregard by the company for regulatory standards and compliance requirements. As RBI raised questions about the promoters as well as the group’s commitment to transparency according to a person familiar with the development.
Four Primary issues at Paytm Payments Bank force RBI to take action against them
- The bank falsified compliance on issues pointed out by the regulatory, meaning it claimed to have rectified the flaws without actually doing so as the RBI found KYC Violations In 2021 the bank did not make the necessary changes and also present in accurate compilers rewards with subsequently led to restriction ending new customer in March 2022. Paytm Payment Bank did not conduct KYC for a significant section of quiet customers absence of KYC for a large number of customers (running into lakhs).
- There was intense of single PAN (Permanent Account Number) and identified documents issued by the Income Tax Department being linked to hundreds of customers during its probe the RBI found that in thousands of cases, the same PAN was linked to more than 100 customers and in the same case is to more than 1000 customers. The total value transactions run into crores or rupees which is beyond the regulatory limit in minimum KYC prepaid instruments using money laundering concerns.
- The non-financial businessmen of the payment bank were closely intertwined with those of the Promoter group companies. This, the person cited above said was, against the conditions prescribed by the RBI licence to Paytm Payment Bank.
- Paytm Payment Bank allowed some customers to keep more than 1 lakh in their account the maximum permitted by the regulator at the time the person added The bank which started operation in 2017 broke this rule within a year, they said the ceiling was raised to 2Lakh in 2021.
Even Ashneer Grover co-founder of Bharat Pe has also criticised the steps of RBI he said on X that I don’t understand why RBI doesn’t want fintech in the business of late all regulation moves against fintech such as will take sector or together. He also urges the finance ministry, Narendra Modi and Nirmala Sitharaman to resolve the issue.
What Paytm Said About the Matter
Vijay Shekhar Sharma Said on X.com (Twitter) “We are not completely sure of things like what exactly is wrong but we will figure out everything soon we will reach out to RBI to see what can we do you told us that Paytm employees.
He also said that Paytm would continue to operate beyond February 29 your favourite app is working will keep working beyond 29 February as usual I will with every Paytm member salute you for your relentless support India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it.
Frequently Asked Questions (FAQs)
Will Paytm QR work as before?
Your Paytm QR is the same as before. You can use it to fulfil all your day-to-day needs.
Will the sound box and Paytm card machine work as before?
Yes, our offline merchant payment network offerings like Paytm QR, Paytm Soundbox, and Paytm card machines are working exactly as earlier. You can accept payments with ease on them.
Continue to you Paytm to do which are these and pay my bills?
Yes absolutely you can continue using the Paytm app for all your bill payments and recharges, always Rest assured, Paytm continues to support a avoid range of payment options for your convenience.
can I continue to use Upi on the payment app?
Yes, You can continue using UPI services on your Paytm app without any interruption. You can make QR code payments across stores, online payments and send money.
Can I continue to use the Paytm Bank wallet?
Yes, You can continue to use Paytm Payment Bank wallet services Please note that you will not be able to add money to your Paytm Payment Bank wallet after February 29th, 2024, however, there is no restriction on the usage of your existing balance from your wallet even after Feb 29th, 2024.
