IT audit terms for Paytm Payments Bank by RBI to be set up
The Reserve Bank of India is setting up terms of reference for an independent technology audit of Paytm Payments Bank. The move comes after the regulator had banned new customers onboarding in order to tackle the alleged violations of customer acquisition and privacy that may possibly have been included in the data flow to Chinese origin companies. Paytm founder Vijay Shekhar Sharma has, however, denied all allegations that surfaced in a media report that data was allegedly shared with Chinese entities that could have led to regulatory curbs.
Paytm Payments Bank is going to submit to the regulator a list of manes as potential audit candidates, for its approval. Furthermore, the regulator can finalize the reference terms based on findings that include a “series of lapses in meeting the Know Your Customer (KYC) norms”.
“The payments bank did not plug the gaps in the system even after repeated relevant references by the regulator. There were consistent deficiencies found in the bank’s KYC process, like accounts that needed a full KYC were not done,” said one of the officials. “Data from the payments bank was also flowing to the wallet operator, which was not quite a watertight compartment and against central bank rules. All in all, compliance was either pending, or unsatisfactory.”
Denying all the allegations, Paytm’s millionaire founder and majority shareholder said, “I want to inform and confirm that in various observations RBI has shared with Paytm Payments Bank, there is absolutely no reference to any data sharing or servers being outside or data sharing with any unauthorized personnel national or international–any country whatsoever.”
The central bank of India said that the onboarding of new customers will be subjected to specific permission by RBI after reviewing IT auditors’ reports. “This action is based on certain material supervisory concerns observed in the bank,” RBI said.