On January 31, the Reserve Bank of India dealt a severe blow to Paytm Payments Bank.
Unprecedented ban on all banking activities from February 29, leaving no room for recovery.
Six-year history marked by serious violations, risking customer data and lacking transparency.
Licensing violations in 2018, with the RBI halting new accounts, later lifted in 2018.
October 2021, PPBL fined ₹1 crore for submitting misleading information during the application process.
Late 2021, lapses in technology, cybersecurity, and KYC compliance surfaced.
March 2022, RBI imposed restrictions, halted new customer onboarding, demanded a comprehensive audit.
October 2023, ₹5.39 crore penalty for KYC norm violations after the audit.
KYC irregularities, frozen accounts, and concerns about dormant and mule accounts.
Lack of transparency, false compliance reports, and questionable dealings with the parent entity OCL.
No leniency shown; industry experts suspect it may lead to the revocation of the bank's license.
Potential impact on Paytm's other businesses, especially lending relationships and merchant base.
Requirement to move merchant accounts from PPBL to other banks could lead to customer shifts.
Disruption in Paytm's UPI payments journey due to the shutdown of its nodal account.
Paytm must ensure adequate liquidity to meet customer requirements amid the ban on top-ups.