RBI letter to Paytm Bank does not talk about data access, says Vijay Shekhar – Times of India

NEW DELHI: The Reserve Financial institution of India (RBI) in its letter to Paytm Payments Bank has not talked about something about information entry however has requested the corporate to hold out an audit from a 3rd celebration, a high official of the corporate mentioned on Monday.
Vijay Shekhar Sharma, the chairman of digital monetary companies agency One97 Communications and the promoter of Paytm Funds Financial institution (PPBL), instructed PTI that the financial institution is a totally Indian owned managed entity and has constructed its personal system based mostly on expertise “made in India”.
The RBI final week directed PPBL to cease opening new accounts amid “materials supervisory considerations” noticed within the financial institution.
The financial institution has additionally been directed to nominate an IT audit agency to conduct a complete system audit of its IT system.
Shares of One97 Communications, which holds a 49 per cent stake in PPBL, have been hammered on inventory exchanges on Monday after studies claimed that PPBL’s servers have been sharing data with China-based entities that not directly personal a stake in Paytm Funds Financial institution.
“RBI has clearly articulated a listing of duties that Paytm Bank has to finish and get the audit carried out. I additionally wish to verify that not one of the obligations talked about within the letter of commentary carries any reference of knowledge entry or unauthorised information entry or authorised entry or information entry or information localisation or information system or servers associated to any overseas shareholder entry or overseas entry,” Sharma mentioned.
He mentioned that the PPBL makes use of a system of Infosys and all its information resides in servers which are in India and managed by individuals of the financial institution and their expertise companions who’re in India.
When requested about RBI’s route on the appointment of an IT audit agency, Sharma mentioned, “These are associated to IT course of techniques the place they want affirmation and so they mentioned as a substitute of self-submission you will get it audited by somebody as a result of RBI does that as a course of.”
Sharma holds a 51 per cent stake in Paytm Funds Financial institution (PPBL), whereas the remaining 49 per cent is held by One97 Communications. China-based Alibaba Group is the most important shareholder in One97 Communications with about 31 per cent stake by its subsidiaries.
“Even in the present day or previously, there has by no means been any request from any overseas shareholder of Paytm Payments Banks. By no means has been previously nor it’s in the present day. Paytm Financial institution is a proud information localised agency since its inception.. the place no server is saved outdoors or any outdoors particular person has any entry to any information or in any way,” Sharma mentioned.
Paytm Funds Financial institution was included in August 2016 and formally started its operations in Could 2017 from a department in Noida. As per the final disclosed numbers, PPBL had round 6.4 crore prospects.
RBI had prohibited PPBL in June 2018 as nicely from onboarding new prospects on account of supervisory considerations. The restrictions have been lifted on December 31, 2018.
Sharma mentioned that there was no penalty imposed at the moment by the RBI and the corporate had defined to the banking regulator that the fault was within the system of the opposite financial institution and never of their system.
In one other incident, the RBI had issued a show-cause discover dated July 29, 2021, stating that Paytm Funds Financial institution had dedicated an offence beneath the Cost and Settlement Programs Act, 2007, by submitting false data to RBI confirming completion of the switch of the Bharat Invoice Cost Working Unit enterprise by One97 Communications to PPBL.
The RBI had imposed a penalty amounting to Rs 1 crore on Paytm Funds Financial institution for the offence.

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