“Report Claiming Data Leak To China Firms False”: Paytm Bank

New Delhi: Paytm Payments Bank, from which the transactions for digital payments giant Paytm are processed, said today that a report claiming that it had leaked data to Chinese firms is “false and sensationalist.” Last week, Paytm was asked by RBI to stop enrolling new customers.

News agency Bloomberg had reported that the company’s servers are sharing information with China-based entities that indirectly own a stake in the Paytm payments bank, was learned by RBI.

“Paytm Payments Bank is proud to be a completely homegrown bank, fully compliant with RBI’s directions on data localization. All of the Bank’s data resides within India,” the company said today.

On this the RBI is yet to comment.

On March 11 the RBI had told Paytm to stop enrolling new customers and ordered an audit of its IT systems. They had cited, “certain material supervisory concerns observed in the bank”.

Only after reviewing the IT auditor’s report, Paytm Bank will be permitted for enrolling new customers, RBI had stated.

After this move by RBI the shares of Paytm witnessed a downfall. The company’s stock also plunged over the weekend when it was revealed that Paytm Founder and Chief Executive Vijay Shekhar Sharma had been briefly detained after he allegedly rammed a policeman’s car and fled.

51 percent of Paytm Payments Bank are owned by Sharma, while Paytm parent One97 Communications holds the rest.

The accident was characterized as minor offence by Paytm. Shares of the company tumbled more than 13 percent on Monday.

Including Monday’s losses, Paytm shares have fallen more than 68 per cent to ₹ 680.40 from its issue price ₹ 2,150.

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