The Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank Ltd on Wednesday, barring the bank from accepting fresh deposits and engaging in credit transactions across its services due to regulatory non-compliance and supervisory concerns.
In a released statement, the central bank noted that an audit report revealed “persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.”
Effective February 29, Paytm Payments Bank is prohibited from accepting additional deposits in any customer accounts, and no credit transactions, including those via wallets, will be allowed. The RBI emphasized that customers are permitted to withdraw or utilize balances without restrictions.
Last month, One 97 Communications, the parent company of Paytm, confirmed a “slight reduction” in its workforce as part of cost-cutting measures, without specifying the number of job cuts. The spokesperson mentioned potential cost savings of 10-15 percent through the implementation of Artificial Intelligence (AI).
During the fiscal year ending March 2023, Paytm had an average of 32,798 directly employed staff and 1,589 contracted employees globally across its various units, as per its annual report. In August 2023, Paytm Chairman Vijay Shekhar Sharma announced his intention to buy a 10.3 percent stake worth $628 million (approximately Rs. 5,195 crore) in the company he founded from an arm of Chinese fintech giant Ant Financial, becoming its single largest shareholder.
