Home / Industry / Banking /  Paytm Payments Bank hopes RBI to lift curbs on taking new customers soon
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Paytm Payments Bank, which facilitates transactions on mobile commerce platform Paytm, expects the issue of RBI ban to onboard new customers would be resolved in 3-5 months after the clearance by the banking regulator to the processes being put in place.

In March, the Reserve Bank of India ordered a comprehensive audit of the company's IT systems, citing "material" supervisory concerns, without elaborating further, and barring it from taking on new customers.

The bank is working with the RBI to complete the IT audit and address the regulator's concerns.

"The process is underway and we think it should take three to five months from where we are right now," Madhur Deora, group chief financial officer, Paytm, said on Sunday.

Deora also said that the RBI has not given any fixed timeline for the process and the clearance to onboard new customers by Paytm Payments Bank will be given as soon as it is certified.

Paytm in March denied a Bloomberg news report that said RBI had found its servers were sharing information with China-based entities that indirectly own a stake in the firm.

The regulator has also directed the bank to appoint an information technology (IT) audit firm to conduct a comprehensive system audit of its IT system.

"All existing customers are not impacted. New users can use UPI, Paytm Postpaid and all the services. What they cannot do is open a brand new relationship with Paytm Payments Bank which is a very small percentage of our business in terms of new users," Deora said.

Deora said the company was on track to achieve profitability by September 2023.

"We are seeing good growth in high margin businesses and as a result we are seeing improvements in contribution margin."

"Our indirect expenses will not grow as fast as last year as we don't expect to make any significant investments in new businesses or employee cost this year as we have already made those in the last year," he added.

Paytm is backed by China's Alibaba Group Holding and its affiliate Ant Group.

One 97 Communications Ltd, the parent of fintech firm Paytm, on Friday reported a wider fourth-quarter loss due to higher payment processing, marketing and employee costs.

The company has reported a widening of its consolidated loss to 761.4 crore for the quarter ended March 2022.

The company had posted a loss of 441.8 crore in the same period a year ago. The losses, however, narrowed on a sequential basis. Its consolidated loss stood at 778.4 crore in the quarter ended December 2021.

The revenue from operations of One97 Communications (OCL), however, jumped by about 89 per cent to 1,540.9 crore during the quarter from 815.3 crore in the year-ago period.

Expenses on employees more than doubled to 863.4 crore from 347.8 crore in the March 2021 quarter.

Paytm made its stock market debut in November last year in one of the country's biggest-ever initial public offerings, but the shares have since sunk 70%.

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