Paytm Payments Bank asked to Stop the Onboarding of New Customers by RBI

Current Context: The Reserve Bank of India (RBI) has directed Paytm Payments Bank Ltd to stop the onboarding of new customers with immediate effect.

• RBI has also directed Paytm Payments Bank to appoint an IT audit firm that will perform a comprehensive System Audit of its IT system.
• The decision by RBI was taken under section 35A of the Banking Regulation Act, 1949.
• After the completion of the audit, RBI will review the reports and as per the reports, it will take further decisions for onboarding of new customers.
• The RBI has not disclosed reasons for the decision. However, in the past RBI has found various deficiencies with the bank and in the recent supervisory inspection at Paytm Payments Bank it was detected with a gap with regard to KYC and customer onboarding.
• Static Part: 
• HQ of Paytm Payments Bank: Noida, Uttar Pradesh.
• Chairman of Paytm Payments Bank: Vijay Shekhar Sharma