One 97 Communications Ltd (Paytm) shares fell over 13% to Rs 672.1 and touched the all-time low on the BSE in Monday’s intra-day trade after the Reserve Bank of India (RBI) on March 11 directed Paytm Payments Bank to stop the onboarding of new customers. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system, the RBI said in a release.

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“Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing the report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” the RBI said.

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On May 23, 2017, Paytm Payments Bank began operations. Paytm Payments Bank, founded by Vijay Shekhar Sharma, is expected to apply to the RBI for a small finance bank (SFB) license by June. Vijay Shekhar Sharma, the chairman of Paytm Payments Bank, owns 51% of the company.

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It is not immediately obvious what exactly prompted the RBI’s move. The RBI stated that the move was taken in response to “material supervisory concerns” observed in the bank.

According to the Paytm Payments Bank website, the company has 100 million KYC clients and adds 0.4 million users per month. “We are also the largest FASTag issuer, with over 8 Million FASTag units issued,” according to the website.

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Paytm Payments Bank announced on December 9 that it had been placed in the Second Schedule to the Reserve Bank of India Act, 1934. According to a press release from the company, this allowed it to explore new business opportunities.

These include RFPs issued by the government and other large corporations, main auctions, fixed-rate and variable-rate repos, and reverse repos, as well as participation in the Marginal Standing Facility, according to the company.

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The RBI issued a monetary penalty on Paytm Payments Bank in October 2021 for violating various guidelines. This occurred following an RBI evaluation of PPBL’s application for the issuance of the final Certificate of Authorization (CoA).

The RBI discovered that PPBL had submitted information that did not accurately represent the facts. As a result, the RBI issued a warning to PPBL and levied a penalty.