RBI Report: Potential Revocation of Paytm Payments Bank License

Almost endless are the issues facing Paytm and its users. According to a recent development, the financially troubled Paytm Payments Bank may have its banking license revoked by the Reserve Bank of India.

According to a Businessline article, the seasoned fintech giant has been regularly warning the RBI over the last few months, and this has resulted in the revocation of its banking licence.

Remarkably, the audit stated that the Paytm Payments Bank has at least four times ignored the regulator's warnings. Additionally, it stated that although 'inadequate KYC compliance' proved to be a serious impediment, numerous financial giants were interested in acquiring Paytm Payments Bank.

Remarkably, if the RBI decides to revoke the license, it will be the first instance of that kind of action in the previous 20 years.

Payments Bank Paytm Gets 'Direction' From FIU Regarding A Ceasing Business Segment

The Financial Intelligence Unit-India (FIU-IND) fined Paytm Payments Bank Limited (PPBL) on Friday. The company's affiliated business has been hit with a financial penalty of Rs 5.49 crore by the agency.

"The penalty relates to problems in a company unit that was shut down two years prior. A Paytm Payments Bank representative stated, "Since then, we have improved our monitoring systems and reporting procedures to the Financial Intelligence Unit (FIU)."

As the Reserve Bank of India's (RBI) prohibition on the bank's operations draws nearer, One 97 Communications Ltd., the parent company of Paytm, and PPBL declared earlier in the day that they would be terminating a number of inter-company agreements.

The business stated in a BSE filing that Paytm and PPBL had "mutually agreed to discontinue various inter-company agreements with Paytm and its group entities" as part of the effort to "reduce dependencies."

Additionally, in order to promote PPBL's governance, which is separate and apart from its shareholders, the company's shareholders have decided to streamline the Shareholders Agreement (SHA). The organization has declared intentions to form fresh alliances with other banks and implement strategies to offer smooth services to its clients and retailers.