The Reserve Bank of India has since lifted the restriction it had imposed on Paytm Payments Bank. Paytm has now announced that it will resume its KYC process effective December 31. It may be recalled that the RBI had stepped in when Paytm Payments Bank started opening accounts for their customers after obtaining the licence for operating a payments bank.
At that time, the regulator found that the organization had been in violation of certain norms imposed under the licensing terms of the payments bank. Primarily, Paytm was converting its customers in the Paytm wallet into the bank account holders and these customers were being offered a few privileges to make purchases on its ecommerce platform Paytm Mall. This, the RBI felt was in contravention and in a way, a conflict of interest situation was created.
Strangely, there has been no public statement by RBI on what transpired and why the restriction is being lifted. Paytm has replaced the CEO of Paytm Payments Bank, bringing in an ex-NPCI executive in his place. The new CEO, Satish Gupta has said Paytm Payments Bank is committed to providing last-mile banking services to its customers, ensuring better financial inclusion. No fines have been imposed by RBI, in the case Paytm claims. RBI had conducted an audit of Paytm Payments Bank and these decisions have been an outcome of this audit.
Paytm has already managed to open 42 million accounts and plans to take it past 100 million by the end of the year 2019.
The company had been running its digital Paytm wallet for some time before it launched the Payments bank and then converted the wallet account holders into the bank’s customers. The interoperability still continues. It reflects in the financial figures of the bank as well. Of the Rs 144 crore deposits in its books, a large portion has come from the wallet.