Just a day before the presentation of the interim budget, RBI announced to take strict action against Paytm Payments Bank. Due to this, there is an atmosphere of fear among the customers of Paytm Payments Bank. A large number of people were using Paytm Payments Bank. Now they are worried about their money. The question is why was RBI forced to take such a strict step?
Generally, the Union Budget remains the most discussed before and after its presentation. This time on February 1, Finance Minister Nirmala Sitharaman presented the interim budget. There was a lot of discussion about this last week. But, Paytm was more in discussion than this . In fact , RBI took major action against Paytm Payments Bank just a day before the presentation of the interim budget . The central bank imposed several restrictions on Paytm Payments Bank . There has also been a ban on taking fresh deposits.
Due to this, people using Paytm are scared. He is always worried about his money. The question is why did RBI take such a big step? Which rule has Paytm Payments Bank violated? Has Paytm Payment Bank knowingly violated the rules? Let us try to know the answers to these questions.
1. Violation of KYC rules
This means that there are millions of bank accounts in Paytm Payments Bank whose owner’s identity is not mapped with their accounts. RBI found surprising facts in its investigation. Same PAN number was given with hundreds of accounts. Transactions worth thousands of crores of rupees were made in KYC pre-paid instruments, which is much more than the prescribed limit. This has increased suspicion about money laundering.
2. Ignoring RBI rules
RBI rules mandate maintaining distance between the bank and its parent company. But Paytm Payments Bank (PPBL) did not follow this rule. He mixed financial and non-financial business with his promoter group companies. The bank used the IT infrastructure of its parent company OCL. Transactions were done through the app of the parent company. This raises serious concerns about data privacy and data sharing.
3. Lied to the regulator regarding compliance with rules
Paytm Payments Bank continued to lie to RBI regarding compliance with the rules. On scrutiny of the compliance documents submitted by Paytm Payments Bank to RBI, they were found to be false. It was investigated not only by RBI supervisors but also by outside auditors. Paytm Payments Bank paid huge sums to OCL, details of which were not disclosed in its financial statements. This reveals financial irregularities.
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