The Reserve Bank of India (RBI) has announced that Paytm Payments Bank will be prohibited from accepting additional deposits in any customer accounts after February 29.
The Reserve Bank of India on Wednesday restricted Paytm Payments Bank Ltd from taking fresh deposits and credit transactions across its services, due to non-compliance of regulations and supervisory concerns.
An audit report revealed “persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” the central bank said in a release.
Paytm Payments Bank will not be allowed to take further deposits in any customer accounts after February 29, the RBI said.
It added that no credit transactions will be allowed either, including via wallets.
The withdrawal or utilisation of balances by its customers will be permitted without restrictions, the central bank said.
Last month, One 97 Communications, parent of Paytm, confirmed a “slight reduction” in its workforce on Monday as part of cost-cutting measures without specifying the number of jobs.
A company spokesperson refuted media reports suggesting the possibility of cutting over 1,000 roles, stating, “We will be able to save 10-15 percent in employee costs as Artificial Intelligence (AI) has delivered more than we expected it to,” as reported by Reuters.
According to its annual report, during the fiscal year ending March 2023, Paytm had an average of 32,798 directly employed staff and 1,589 contracted employees worldwide across its various units.
In August 2023, Paytm Chairman Vijay Shekhar Sharma announced his intention to acquire a 10.3 percent stake valued at $628 million (approximately Rs. 5,195 crore) in the company he founded from an arm of Chinese fintech giant Ant Financial. This deal would make him the single largest shareholder in the company.