PayTM clarifies RBI bar on new customers

Economic Times reports:

The RBI barred Paytm Payments Bank from taking on new customers on March 11 because it had allowed data to flow to servers abroad in violation of India’s rules, and didn’t properly verify its customers, Bloomberg reported on Monday, citing a person familiar with the matter.

Annual inspections by the Reserve Bank of India found that the company’s servers were sharing information with China-based entities that indirectly own a stake in Paytm Payments Bank, the source added.

Read more at Economic Times.

But PayTM denies it is sharing data with China. TechCrunch reports:

Refuting the report, a Paytm spokesperson added that Paytm Payments Bank is a “homegrown bank and is fully compliant with RBI’s directions on data localisation.”

Vijay Shekhar Sharma, founder and chief executive of Paytm, further categorically denied the report on national TV, adding that RBI’s notice to Paytm Payments Bank “absolutely does no point that mentions any data access, or server or data access through whatsoever. Or server being outside of India,” he said.

Read more at TechCrunch.

Later, Newsroom Post reported that Paytm CEO Vijay Shekhar Sharma said the central bank has called for an IT audit of the company “and nowhere it’s related to the financial transactions of the company.”

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