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Paytm Payments Bank fined over KYC lapses

Paytm Payments Bank fined over KYC lapses

The Reserve Bank of India has fined Paytm Payments Bank about $650,000 for know your customer failings.

Last year the central bank told Paytm Payments Bank to stop onboarding new customers and to appoint an IT audit firm, citing "supervisory concerns".

Now, after "special scrutiny" of the bank from a KYC/AML perspective, the RBI has found non-compliance with some provisions of its rules.

The bank failed to identify beneficial owners of entities on-boarded by it for providing payout services and did not monitor payout transactions and carry out risk profiling of entities availing payout services.

In addition, Paytm Payments Bank failed to report a cyber incident "without delay" while a video-based customer identification process allowed connections from IP addresses outside of India.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 16 October, 2023, 11:541 like 1 like

PayTM Payments Bank is a special type of bank that can accept deposits but cannot lend. When payments bank concept was envisaged, it was expected to earn revenues from fees for distributing other financial and non-financial products. Seems like that movie didn't end well.

This fine may be cheaper than the cost of full compliance with KYC / AML rules!