New Delhi: In a sensational disclosure related to debarring of Paytm Payments Bank by the Reserve Bank, it has come to light that the punitive action was taken because of its alleged data flow to Chinese servers and not due to internal mismanagement.
The report also claims that the company didn’t verify its customers properly. It claimed that Paytm’s servers were found to be sharing information with China-based entities that hold a stake in Paytm Payments Bank.
Paytm Payments Bank is a joint venture between Paytm and its founder member Vijay Shekhar. And, the Chinese firms which hold a stake in Paytm include investors like Alibaba company & its affiliate Jack Ma’s company.
The RBI recently barred Paytm Payments Bank from taking new customers on board from March 11. And, the reason it cited for putting restrictions was ‘supervisory concerns’. Since then, Paytm shares have been in a tailspin with company stocks registered a drop of 10% in the last few days.
In the recent past, India has imposed restrictions on various other international companies like American Express and Mastercard but the imposition of restrictions on Paytm raises major concern because of the uneasy relationship between India and China.
The government also banned over 100 hundred Chinese Apps for not following Indian standards as their actions smacked of illicit conduct and were reported to be acting in connivance with their Chinese operators. Raising security concerns, a series of Chinese Apps were blocked by the government of India.
