One PAN, 1,000 accounts: How did Paytm Payments Bank slip the RBI's notice?

One PAN, 1,000 accounts: How did Paytm Payments Bank slip the RBI's notice?

It was discovered that over one thousand individuals had their accounts associated with the same Permanent Account Number.

New Delhi: According to persons acquainted with the situation, the Reserve Bank of India placed harsh limits on the firm due in large part to hundreds of accounts being opened on Paytm Payments Bank without the necessary identity. There are worries about potential money laundering since these accounts with insufficient Know-Your-Customer (KYC) completed transactions on the site worth crores of rupees.

It was discovered that over one thousand individuals shared a Permanent Account Number (PAN) for their accounts. During the verification procedures carried out by the RBI and auditors, it was discovered that the compliance given by the bank was inaccurate.

The RBI is reportedly worried that some accounts may be used for money laundering, according to sources. The RBI has notified the Prime Minister's Office and the Home Ministry of its findings in addition to the Enforcement Directorate.

If any proof of illicit activity is discovered, the Enforcement Directorate would look into Paytm Payments Bank, Revenue Secretary Sanjay Malhotra said Reuters.

Regulatory concerns were raised by reports of significant transactions inside the group and its related parties not being disclosed. The central bank's examination also turned up evidence of governance standards violations, mainly in the context of the parent business One97 Communications Limited's connection with Paytm Payments Bank.

The RBI decided to stop accepting payments via Paytm Payments Bank due to concerns about data privacy generated by transactions made using the Paytm native app. Although user deposits in wallets, savings accounts, FASTags, and NCMC accounts won't be impacted right now, the company's operations will be dependent on other banks until February 29.

Paytm's shares plunged 36% in two days after the RBI notification, wiping off $2 billion of its market worth.

During a conference call with analysts, Paytm founder Vijay Shekhar Sharma downplayed the regulatory steps, calling them a "speed bump" meant to reassure stakeholders under the present uncertainty.