Independent Director Steps Down From Paytm Payments Bank's Board After RBI Directive
Independent director Manju Agarwal is learnt to have resigned from the board after an RBI order imposed restrictions on the bank's operations
Paytm Payments Bank independent director Manju Agarwal is learnt to have resigned from the board after an RBI order imposed restrictions on the bank's operations.
According to a source, Agarwal resigned with effect from February 1.
"Paytm Payments Bank independent director Manju Agarwal has resigned from the company's board after RBI order," the source said.
An email query sent to PPBL did not elicit any reply.
The RBI on January 31 directed the Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29.
Paytm Payments Bank Limited (PPBL) is an associate of One97 Communications Limited (OCL). One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Vijay Shekhar Sharma has a 51 per cent stake in the bank.
RBI said that persistent non-compliance by Paytm with the regulatory guidelines despite nudges over a period of time ultimately led to stern action against the fintech.
RBI on June 19, 2018, prohibited Paytm Payments Bank from opening any new account and wallet with effect from June 20, 2018, on account of supervisory concerns, which were lifted by RBI on December 27, 2018, with effect from December 31, 2018.
The Office of Banking Ombudsman issued a show-cause notice dated March 6, 2019, for Paytm Payments Bank's failure to monitor a certain account maintained with it which had shown a sudden increase in the velocity of daily transactions involving immediate transfer to other banks. The actions were found to be in violation of RBI's provisions on KYC.
RBI rejected Paytm Payments Services Ltd's (PPSL) application to operate as a payment aggregator on November 25, 2022.
The banking regulator asked the firm to re-submit applications within 120 days after it gets government approval on investment made by OCL into PPSL as per FDI guidelines. The regulator asked PPSL to continue operations with the condition that no new merchants should be onboard.
After completion of 120 days, RBI again granted PPSL an extension but without removing the bar on new merchant onboarding.
RBI issued a show cause notice to PPBL on July 29, 2021 for submitting false information to RBI confirming completion of the transfer of the Bharat Bill Payment Operating Unit ("BBPOU") by OCL to PPBL on August 28, 2017. The actual transfer of the BBPOU business by the Company to PPBL was completed only by March 31, 2021.
RBI on October 1, 2021, imposed a penalty amounting to Rs 1 crore on PPBL for a contravention of the Payment and Settlement Systems Act, 2007.
RBI imposed a penalty of Rs 5.93 crore on PPBL on October 10, 2023, after it found several non-compliances including banks failure to identify beneficial owners in respect of entities on-boarded by it for providing payout services.
RBI found that PPBL did not monitor payout transactions and carry out risk profiling of entities availing payout services, breached the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services.
The banking regulator found that PPBL reported a cyber security incident with delay and failed to implement device binding control measures related to 'SMS delivery receipt check'.
PBL video-based customer identification process infrastructure failed to prevent connections from IP addresses outside India.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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