Reserve Bank of India (RBI) has barred Paytm Payments Bank from opening new accounts with immediate effect. RBI has also directed Paytm Payments Bank to appoint an IT audit firm to conduct a comprehensive audit of its IT system.

In a statement, RBI said the onboarding of new customers will be subject to specific permission to be granted by it after reviewing the report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank, RBI said. Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017.