PayTM Payments Bank, which processes transactions for Digital Payment of Paytm India payments, are prohibited from taking new customers for violating the rules by allowing data to flow to servers abroad and do not verify customers with these problems, according to someone who is familiar with this problem.
Annual inspection by the >Reserve Bank of India
found that the company's server shared information with Chinese-based entrities which indirectly had shares in Paytm's bank payment bank, the person said, asked not to be identified as a personal detail. Paytm Payments Bank is a joint venture between Paytm and its founder Vijay Shekhar Sharma. China Alibaba Group Holding Ltd. And its affiliates, Jack Ma Ant Group Co, has Paytm shares, according to Exchange filing.
Email to RBI is not immediately answered. Paytm does not respond to comments that are looking for emails.
In a statement on Friday night, the RBI has quoted the "material supervision problem" for his actions, without describing. Paytm shares are officially known as one 97 Communications Ltd., falls 13.3% Monday.
While the RBI has the same company a certain punished including American Express Banking Corp and MasterCard Inc. For flouling data storage rules, concerns around Paytm Payment Bank are very sensitive considering India's political relations with China.
India has forbidden hundreds of applications related to or from China for the past two years after bloody clashes on the disputed border.VPaytm Payment Bank
, becoming a regulated financial institution, is needed to maintain what is called a service level agreement with its technology vendor which will felt the entity from the owner, said the person.
Paytm Payments Bank also has thousands of adequate clients without the documentation of your adequate customers and their concerns are that some of them can be mules for money laundering, the person adds.
The regulator now wants Paytm Payments Bank to appoint auditor technology through consultation with the RBI, the person said. The company took steps to comply with the RBI direction, including the appointment of an external auditor, the company said in a statement on Saturday. Existing customers will not be affected.
Punishment will make it difficult for Paytm payment banks to be increased to small financial banks, limiting their ability to attract large deposits, according to the Analyst Macquarie Capital Suresh Ganapathy. ICICI Securities Ltd. Cut the target price at Paytm to 1,285 rupees from 1,352 rupees. Stock traded at 691 rupees at 3 P.M. In Mumbai Monday.
Paytm Payments Bank has more than 300 million wallets and 60 million bank accounts, according to its website. The bank said it had more than 100 million customers according to KYC and had added 0.4 million users every month.
deepak singh