In January 2024, the Reserve Bank of India (RBI) imposed restrictions on which of the following payment methods/banks?

The correct answer is Paytm Payments Bank.

Key Points

• In January 2024, the Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank.
• The restrictions were placed due to concerns over the bank's adherence to certain regulatory requirements.
• Paytm Payments Bank was directed to stop onboarding new customers until further notice from the RBI.
• The RBI has asked Paytm Payments Bank to conduct an IT audit to address the regulatory concerns raised.
• This move is part of RBI's broader efforts to ensure compliance and protect consumer interests in the digital payments sector.

Additional Information

• Reserve Bank of India (RBI)
  • The RBI is India's central banking institution, which controls the issuance and supply of the Indian rupee.
  • It was established on April 1, 1935, and nationalized in 1949.
  • The RBI plays a crucial role in the development strategy of the Government of India.
  • It is responsible for regulating the country's financial system and ensuring financial stability.
• Digital Payment Banks in India
  • Digital payment banks are a new model of banks conceptualized by the Reserve Bank of India (RBI) to further financial inclusion.
  • They are expected to provide basic banking services like acceptance of deposits, remittance services, internet banking, and more.
  • They cannot issue loans or credit cards.
  • The objective is to reach out to underserved regions and bring more people into the formal banking system.
• Paytm Payments Bank
  • Paytm Payments Bank is an Indian payments bank, part of the Paytm group, which was launched in 2017.
  • It offers a range of financial services including savings accounts, debit cards, and digital wallets.
  • Paytm Payments Bank operates under the guidelines and supervision of the RBI.
  • The bank has been pivotal in driving the adoption of digital payments across India.
• IT Audit
  • An IT audit involves the examination and evaluation of an organization's information technology infrastructure, policies, and operations.
  • The purpose is to ensure that IT systems are secure, reliable, and compliant with regulations.
  • It helps in identifying vulnerabilities and areas for improvement in the IT setup.
  • Regular IT audits are essential for maintaining the integrity and security of digital financial services.