In connection with the RBI’s crackdown on Paytm Payments Bank earlier this year, over concerns around breach of regulatory norms, the entity filed a comprehensive compliance report in August. It continues to hold a little over ₹1,400 crore in customer deposits at the bank, which are parked in government securities, and deposits with the RBI and other banks, sources told businessline.

“In response to our submission, RBI officials carried a scrutiny during last week of September 2024. We are in continuous engagement with RBI officials to provide them with all the information required for clearances,” stated an internal note, seen by businessline.

Paytm Payments Bank continues to have over 9 crore customers who hold savings, current or wallet accounts with the entity. It did not respond to businessline’s queries till press time. The payments bank, sources say, has taken additional measures to ensure compliance on onboarding of customers, know-your-customer, anti-money laundering, customer data privacy and IT infrastructure.

“We have made significant strides in strengthening our internal processes, enhancing compliance and improving risk management. As we continue to build on these foundations, let us aspire to create a bank that stands out for its technological strength, impeccable compliance culture, robust safety features, and seamless customer experience,” the note said.

It added that this is an apt time to prepare for the opportunities going ahead. “We must test our readiness to go back to the market with renewed energy and passion, offering our customers the convenience, ease, and exceptional service they expect from us,” it said.

What went wrong?

On January 31 this year, the RBI imposed severe business restrictions on Paytm Payments Bank and barred the entity from offering incremental banking services effective March 2024, due to concerns regarding breach of regulatory norms.

By barring intake of deposit, the regulator had effectively halted the core business of the payments bank. Payments bank are not allowed to lend and can only accept deposit of up to ₹2 lakh per customer. Apart from barring the payments bank from deposit mobilisation, the regulator disallowed it from undertaking credit transactions or top ups in any customer accounts, prepaid instruments, wallets, FASTags and NCMC (National Common Mobility Cards).