The Reserve Bank of India (RBI) banned Paytm Payments Bank Ltd (PPBL) last week from taking any more deposits or top-ups in wallets, prepaid cards, user accounts, or FASTags after February 29, 2024. Restrictions imposed by the regulatory actions effectively stop Paytm’s deposit activities in wallets, payments banks, FASTags, and National Common Mobility Cards. Nevertheless, it’s unclear why the RBI has taken such severe action thus far. According to reports, KYC problems could be the cause of the Paytm Payments Bank disaster.
One of the main causes of the Reserve Bank of India’s (RBI) restrictions on Paytm Payments Bank was, according to an NDTV investigation, the creation of hundreds of accounts on the platform without the required identity. Reporters who are acquainted with the situation are quoted. There are concerns about possible money laundering because these accounts with incorrect Know-Your-Customer (KYC) are alleged to have made transactions on the site worth crores of rupees.
It was discovered that over one thousand individuals had connected their accounts to the same Permanent Account Number (PAN). It is alleged that throughout RBI and auditor verification procedures, the bank’s compliance was submitted in error. Sources claim that a “unusually” high number of inactive accounts were also discovered. The RBI notified the Enforcement Directorate (ED) a few months ago about potential violations of anti-money laundering laws and know-your-customer (KYC) standards at Paytm, according to a report published on February 3 in TOI’s sister journal Economic Times. Read Also: When Will You Receive Your IRS Stimulus Debit Card in February 2024? IRS Stimulus Debit Card 2024
According to sources, the RBI is worried that money laundering may have taken place in some of the accounts. Nonetheless, the business insisted that the ED is not currently looking into it or its founder, Sharma.
Vivek Joshi said
Given Paytm’s substantial user base, Financial Services Secretary Vivek Joshi hinted that the RBI would provide some clarification in the matter, adding that the banking authority has acted to safeguard consumers.