Paytm Payments Bank On The Lookout For External Firm To Audit Compliance

Amid the ongoing crisis at Paytm Payments Bank, the bank has reportedly floated a request for proposal (RFP) for external auditors.

The bank is seeking an audit of its compliance and know-your-customer (KYC) processes, NDTV Profit reported citing people aware of the matter.

The RFP has been extended on a restricted basis to external auditors and hence isn’t available in public domain, the report said.

With the external audit, the bank also wants to show the Reserve Bank of India (RBI) that it is compliant in all ways, the report said citing one of the persons aware of the development.

Paytm Payments Bank was not immediately available to respond to Inc42’s queries on the development.

The bank plunged into a crisis after the RBI barred it from taking deposits, credits, or processing top-up transactions in its customer accounts on January 31. The associate bank of fintech giant Paytm has also been barred from processing other banking services like UPI facilities and funds transfer from February 29, 2024 for ‘persistent non-compliances’.

Earlier today, a report said that the central bank clamped down on Paytm Payments Bank after it failed to heed to the bank’s warnings for improving the gaps in its internal risk management, especially in flagging transactions involving politically exposed persons (PEPs). However, Paytm Payments Bank called this ‘highly speculative’.

The RBI is reportedly also mulling cancelling the operating licence of Paytm Payments Bank next month. 

Amid these troubles, Paytm today announced the formation of a group advisory committee to address compliance and regulatory issues. 

The panel will be headed by former SEBI chairman M Damodaran. Ex-president of the Institute of Chartered Accountants of India (ICAI) MM Chitale and erstwhile chairman and managing director of Andhra Bank R Ramachandran will be the other members of the group advisory committee.

Earlier, Paytm founder and chief executive officer (CEO) Vijay Shekhar Sharma also knocked on the doors of the RBI to discuss the central bank’s action. He also met finance minister Nirmala Sitharaman separately. 

Shares of Paytm have been on a freefall since the announcement of the RBI’s restrictions on Paytm Payments Bank. The fintech giant’s shares ended Friday’s (February 9) trading session 6.09% lower at INR 419.85 on the BSE.  

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