The Reserve Bank of India (RBI)  said it has barred Paytm Payments Bank from opening new accounts due to „certain material supervisory concerns“ at the lender.

“Reserve Bank of India has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers,” the RBI said in a statement.

Paytm Payments Bank has also been directed to appoint an IT audit firm to conduct a comprehensive audit of its IT system, it said, adding that onboarding of new customers will be subject to specific permission to be granted by the RBI after reviewing report of the IT auditors.

“This action is based on certain material supervisory concerns observed in the bank,” the statement said.

Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida.

It claims to have over 300 million wallets and 60 million bank accounts of consumers.

Be it a zero balance savings account, spend analytics, digital passbook or a virtual debit card, fixed deposit, money transfer, every feature has been thoughtfully created by Paytm Payments Bank to empower unbanked and underbanked Indians, according to its website information.