RBI directs Paytm and Fino Payments to halt the admission of new customers temporarily

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With the concept of the Payments Bank becoming a hit almost overnight following the demonetisation of high-value currencies by the Government of India in November 2016, payment banks such as Paytm and Airtel Payment Bank since the Government’s move have been the biggest winners. With the cash crunch and the digitisation drive of the Modi-led government, the adoption of the Payments Bank by the masses was inevitable. However, with the Reserve Bank of India noticing that a number of payment bank accounts of customers have been flouting the guidelines and with questions over the eKYC process, the Central Bank has recently directed certain Payment Banks to halt the inclusion of new customers till they review the enrollment process of such Payments Banks.

RBI-Payments Banks
RBI directs Paytm and Fino Payments to halt the admission of new customers temporarily

First with Airtel Payments Bank, the Reserve Bank had earlier requested it to stop enrolling new customers temporarily till the eKYC process was reviewed but soon gave it the green signal to resume enrollment of new customers. Now, the Reserve Bank of India has asked Payments Bank giants Paytm and Fino Payments Bank to halt the enrollment of new customers till certain aspects involving their enrolling process and adhering to the deposit restrictions are ironed out. The RBI has requested the Payments Banks to halt the inclusion of new customers firstly because there are concerns over the eKYC process and secondly because a few accounts have deposited more than Rs.1 lakh (which is the maximum deposit amount) in their accounts. With the aforementioned Payments Banks have carried out the eKYC process for over a 100 million accounts, the RBI wishes to review the process and investigate if there are any discrepancies in the process of enrollment carried out by the banks.

According to Payments Banks, the recent inclusion of the eKYC process by the RBI has resulted in them having just a few hundred customers enrolling over the last few months. The slump in business for the Payments Banks might continue till they upgrade their enrollment process, and ensure that they meet the guidelines as set by the Reserve Bank of India.

Source: Business Standard

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