Paytm Payments Bank denies reports of data leaks to Chinese firms

Business News. Paytm Payments Bank denied reports that RBI action — barring it from onboarding new customers — was due to data leaks to Chinese firms as false and sensationalist.

Here are 10 updates on the latest developments troubling the digital payments giant.

– In a statement late Friday, the RBI had barred the Paytm Payments Bank form onboarding new customers and also called for an IT audit.

Dear customers, we value your relationship with us. We are taking all steps to comply with the RBI directions. Our existing customers can continue to seamlessly use all our banking services.

– Shares of Paytm plunged as much as 13.3% in trade today to hit a fresh all-time low before marginally recovering to close 12.21% lower at 680.40 apiece on NSE.

– However, during the day, fresh reports emerged that the RBI action was based on data leaks to Chinese firms which own stake in the parent company Paytm.

– A report by Bloomberg claimed Paytm Payments Bank was barred from taking on new customers because it violated rules by allowing data to flow to servers abroad and didn’t properly verify its customers.

Annual inspections by the Reserve Bank of India found that the company’s servers were sharing information with China-based entities that indirectly own a stake in Paytm Payments Bank, the report said, citing sources.

– However, Paytm Payments data denied reports that leak to Chinese firms as false and sensationalist. “Paytm Payments Bank is proud to be a completely homegrown bank, fully compliant with RBI’s directions on data localisation. All of the Bank’s data resides within India,” it said.

– The Bank is taking immediate steps regarding the RBI’s decision. We remain committed to working with the regulator to address their concerns as quickly as possible.

PPBL’s existing customers can continue to enjoy the benefits of seamless banking and digital payments services without interruption, Paytm said in a statement.

– “The savings of existing users in their PPBL account, their fixed deposits with partnered banks and the balance maintained in their Paytm Wallet, FASTag or Wallet Card and UPI services are completely safe and functional.

The bank remains fully committed to maintaining high standards of compliance and continues to promote digital banking services for all,” it further said.

– Paytm Payments Bank started operations in 2017 to help Paytm customers without access to the formal banking sector open bank accounts after getting its licence in 2015.

China’s Alibaba Group Holding Ltd. and its affiliate, Jack Ma’s Ant Group Co., own shares of Paytm, according to exchange filings.