BENGALURU (Reuters) – India’s Paytm Payments Bank, which facilitates transactions on mobile commerce platform Paytm, said on Monday all its data is stored in the country, denying a report that a ban on the firm taking on new customers was due to data being leaked to Chinese firms.
Paytm is backed by China’s Alibaba Group Holding and its affiliate Ant Group.
Annual inspections by the Reserve Bank of India (RBI) found that Paytm Payments Bank’s servers were sharing information with China-based entities that indirectly own a stake in the firm, Bloomberg News had reported on Monday, citing a person familiar with the matter.
“Paytm Payments Bank is proud to be a completely homegrown bank, fully compliant with RBI’s directions on data localisation. All of the Bank’s data resides within India,” the company said on Twitter.
The RBI did not immediately respond to a Reuters request for comment.
On Friday, the RBI barred Paytm Payments Bank from taking on new customers and ordered a comprehensive audit of its IT systems, citing “material” supervisory concerns observed in the bank, without elaborating further.
The payments bank is taking immediate steps regarding the RBI’s decision and is committed to working with the regulator to address its concerns, it said in a statement.
Paytm shares slumped 13% on Monday after RBI’s move, with Macquarie Research analysts saying they expect a significant impact on Paytm’s brand and customer loyalty and that the developments would substantially lower the chance of Paytm Payments Bank upgrading to a small finance bank.
Billionaire Vijay Shekhar Sharma, founder of Paytm, said in an interview with television channel CNBC-TV18 on Monday, that no government body had raised any concerns on data sharing or access issues with the payments bank.
Paytm Payments Bank has over 300 million wallets and 60 million bank accounts, according to its website.
(Reporting by Chris Thomas in Bengaluru; additional reporting by Swati Bhat; Editing by Vinay Dwivedi)
