RBI cancels banking licence of Paytm Payments Bank
Mumbai (PTI): The RBI on Friday announced the cancellation of banking licence issued to Paytm Payments Bank for non-compliance with norms, saying the affairs of the bank were conducted in a manner detrimental to the interest of its depositors.
The Reserve Bank of India (RBI) will make an application for winding up of the bank before the high court.
The bank failed to comply with the conditions stipulated in the Payments Bank licence issued to it, the central bank said.
One97 Communications, which owns Paytm brand, in company filing said the company has no exposure to Paytm Payments Bank (PPBL) as it had already impaired its investment in the beleaguered entity as of March 31, 2024.
PPBL, was an associate firm of Vijay Shekhar Sharma-promoted fintech firm Paytm, came under the regulatory scanner on multiple occasions earlier, including in March 2022 when the central bank barred it from onboarding new customers.
The licence was cancelled effective from the close of business hours on Friday, the Reserve Bank of India (RBI) said, adding that Paytm Payments Bank has enough liquidity to repay its entire deposit liability upon winding up.
The RBI said the affairs of the bank were conducted in a manner detrimental to its own interests as well as its depositors.
"The general character of the management of the bank is prejudicial to the interest of depositors as also the public interest... no useful purpose or public interest would be served by allowing the bank to continue...," the RBI said in a statement.
Paytm Payments Bank was not complying with certain norms of the Banking Regulation Act, 1949, it added.
According to the central bank, Paytm Payments Bank Ltd is prohibited from conducting the business of "banking" or any additional business specified under the Banking Regulation Act with immediate effect.
Paytm Payments Bank started operations as a payments bank with effect from May 23, 2017. The Reserve Bank had issued a licence to the bank to carry on the business of payments bank in the country.
The bank has been under the RBI lens over the past many years.
Paytm in the regulatory filing cited disclosure dated March 1, 2024 and said it does not have any exposure to PPBL or any material business arrangements with PPBL.
"No services provided by the Company are in partnership with PPBL. Additionally, PPBL operates independently, with no board or management involvement from the Company. There is no direct financial impact on the Company since, as previously disclosed, the Company had already impaired its investment in PPBL as of March 31, 2024," the filing said.
Paytm said its services will continue uninterrupted.
The services include the Paytm app, Paytm UPI, Paytm Gold and all other services offered by its subsidiaries and associated companies such as Paytm QR, Paytm Soundbox, Paytm card machines, and Paytm Payment Gateway, Paytm Money among others.
Earlier, PPBL was directed to stop onboarding new customers with effect from March 11, 2022 amid "material supervisory concerns" observed in the bank.
The bank was also directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.
Thereafter, on January 31, 2024 and February 16, 2024, certain business restrictions were also imposed on the bank, including disallowing any further deposits/credits/ top-ups in existing customer accounts, prepaid instruments, and wallets.
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Pawan Khera denied anticipatory bail in passport case: Cong stands up for senior member
New Delhi: The Congress party has stood by Pawan Khera, the Chairman of the party’s Media and Publicity Department, expressing confidence that regardless of hurdles like politics of threat and intimidation, justice would emerge victorious.
Khera was denied anticipatory bail by the Gauhati High Court on Friday in the case filed against him by Assam Chief Minister Himanta Biswa Sarma's wife Riniki Bhuyan Sarma for alleging that she possessed not only multiple passports but also undisclosed properties abroad.
Senior Congress leader Jairam Ramesh has said in a post in Hindi on his ‘X’ account, “The entire Indian National Congress stands in solidarity with Pawan Khera, the Chairman of its Media and Publicity Department. The process to challenge the Gauhati High Court’s decision in the Supreme Court is underway.” In the post, which he put up on Friday, Ramesh has added, “We are confident that justice will prevail over the politics of threats, intimidation, and harassment.”
Bhuyan Sarma has lodged also an FIR seeking legal action against Pawan Khera for his allegations that she possesses passports of three countries and owns a company in the US, which had invested Rs. 50,000 crores. She has filed criminal cases against the Congress leader at the Guwahati Crime Branch Police Station under various sections of the Bharatiya Nyaya Sanhita (BNS).
