The Reserve Bank of India (RBI) moratorium on Paytm Bank is expected to be resolved in three to five months time, Paytm's Group Chief Financial Officer Madhur Deora said. In March, the RBI had ordered a comprehensive audit of the company's IT systems, citing 'material' supervisory concerns and barred it from taking on new customers.
The Paytm Payments Bank is working with the Reserve Bank of India to complete the IT audit and address the regulator's concerns. "The process is underway and we think it should take three to five months from where we are right now," Madhur Deora, group CFO, Paytm, told Reuters on Sunday.
Read | RBI again bars Paytm Payments Bank from opening new accounts
RBI has not given any fixed timeline for the process and the clearance to onboard new customers by Paytm Payments Bank will be given as soon as it is certified, CFO added. The Reserve Bank of India has also directed the Paytm Payments Bank to appoint an information technology audit firm to conduct a comprehensive system audit of its IT system.
Paytm is backed by China's Alibaba Group Holding and its affiliate Ant Group. In March, Earlier, a Bloomberg news report that said RBI had found its servers were sharing information with China-based entities that indirectly own a stake in the firm, which the Paytm denied in March.
In March this year, Paytm Payments Bank joined the list of financial companies and lenders, such as MasterCard, Diners Club, American Express and HDFC Bank, that have been penalised for systemic glitches by the banking regulator.
Paytm Payments Bank is a joint venture between Paytm founder Vijay Shekhar Sharma and the listed holding company One97 Communications, the parent of Paytm. Sharma owns 51% in the bank in his personal capacity. The company started operations in 2017 and claims to have 60 million bank accounts with 4 lakh users added every month, according to its website.
(With Agency Inputs)
