New Delhi: The Reserve Bank of India (RBI) has taken major action on the online payment app Paytm. RBI has ordered Paytm Payments Bank to stop inducting new customers with immediate effect. It has also directed Paytm to appoint an audit firm to its IT system. The RBI has issued a press release on Friday (March 11, 2022).

According to the press release, RBI has taken this action on Paytm under Section 35A of the Banking Regulation Act, 1949. The RBI notice said, "RBI, in the exercise of its powers today, inter alia, under section 35A of the Banking Regulation Act, 1949, has directed Paytm Payments Bank Limited to stop the addition of new customers with immediate effect." The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT systems. It further states that 'Paytm Payments Bank Ltd. will be able to add new customers only after the permission of RBI after the IT audit examination. This action by RBI is based on certain concerns observed in Paytm.

However, complete information regarding this action has not yet been revealed. According to the report, Vijay Shekhar Sharma's company Paytm was likely to get a small finance bank (SFB) licence from the RBI by June this year. However, it does not seem that this is because of this that the RBI has taken this action. Paytm started on May 23, 2017. According to experts tracking the company, paytm payments bank's metamorphosis as a small loaning bank will allow the company to create a bigger business model.

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