New Delhi: The Reserve Bank of India (RBI) issued a notification on January 31, banning many services of Paytm payments bank.
Reason for a ban on Paytm payments bank:
Opening multiple accounts on Paytm payments bank without proper identification also became a reason for the ban. Multiple accounts linked to the same PAN card on Paytm payments bank.
KYC of many accounts was not done. Transactions worth several crores were done from bank accounts whose KYC was not done. Due to this, the fear of possible money laundering has arisen.
According to the NDTV report, “It was found that more than 1000 users have linked accounts with the same PAN card. “The compliance submitted by the bank was found to be incorrect during the verification processes conducted by both the RBI and the auditors.”
RBI found that some accounts have been used for money laundering. Along with informing the ED, the RBI has also informed the Home Ministry and the Prime Minister’s Office regarding this matter.
ED can also investigate in Paytm payments bank case:
Revenue Secretary Sanjay Malhotra, while talking to Reuters, said that if any evidence of illegal activity is found then ED will also investigate the matter.
The central bank’s investigation also revealed lapses in standards, particularly in the relationship between Paytm Payments Bank and its parent company One97 Communications Limited. Transactions done through the native app in Paytm payments bank have raised data privacy concerns. Due to this RBI had to stop the transactions happening through Paytm payments bank. However, users’ deposits in savings accounts, wallets, FASTags, and NCMC accounts will not be affected at all.
What was the impact on the stock of Paytm payments bank?
After the RBI notice, there has been a decline of 36% within 2 days and also 2 billion dollars have been reduced from the market value. Paytm founder Vijay Shekhar Sharma dismissed the action taken by RBI as a ‘speed bump’.
