Manju Agarwal, Paytm Payments Bank’s independent director, resigned after an RBI ruling limited operations. Due to KYC violations and account activity monitoring concerns, the order stopped taking deposits and top-ups.
Manju Agarwal, Paytm Payments Bank’s independent director, resigned after an RBI order restricted operations.
The regulatory order required the bank to stop taking deposits or top-ups in customer accounts and instruments after February 29.
“Paytm Payments Bank independent director Manju Agarwal has resigned from the company’s board after RBI order,” a source said.
Paytm Payments Bank, owned by One97 Communications Limited, has been regulated. In 2018, the RBI banned the bank from creating new accounts and wallets due to regulatory concerns, but this was overturned. However, KYC violations and account activity monitoring difficulties arose.
On November 25, 2022, RBI denied PPSL’s payment aggregator application. The banking authority required the firm to re-submit applications within 120 days of government approval for OCL’s PPSL investment under FDI criteria.
The regulator asked PPSL to continue operations without additional merchants. RBI extended PPSL again after 120 days, but without lifting the merchant onboarding ban.
On October 1, 2021, PPBL was fined Rs 1 crore for violating the Payment and Settlement Systems Act, 2007.
On October 10, 2023, the RBI fined PPBL Rs 5.93 crore for multiple non-compliances, including failing to identify beneficial owners of firms on-boarded for payout services.
RBI determined that PPBL did not monitor payout transactions and risk profile firms using payout services, breaking the legal ceiling of end-of-day amount in certain customer advance accounts.
PPBL delayed reporting a cyber security problem and failed to apply device binding control measures for the ‘SMS delivery receipt check’, according to the banking regulator.
The PBL video-based customer identification procedure infrastructure failed to block IP addresses outside India.
Conclusion
Manju Agarwal, Paytm Payments Bank’s independent director, resigned after an RBI ruling limited operations. After the RBI ordered the bank to stop taking deposits or top-ups in various customer accounts and instruments, the order was criticized for account activity monitoring and KYC violations. Under supervisory concerns, the RBI barred the bank from establishing new accounts and wallets in 2018. The RBI fined Paytm Payments Services Ltd. (PPSL) for violating the Payment and Settlement Systems Act, 2007 and failing to identify beneficial owners in payout services.
