Ban On Paytm Payments Bank Due To Chinese Data Leak? Paytm Founder Denies These Reports

There were reports in the market that alleged that the Paytm Payments Bank are allowing the data to be leaked to Chinese firms. Vijay Shekhar Sharma, CEO of Paytm, who is also the majority shareholder in the same, denied these allegations.

Sharma said in an exclusive conversation with CNBC-TV18, “Absolutely false. The report is completely factually wrong. It is false to assume that the bank is sharing any data with Chinese or any other foreign entities”.

Alleged Data Leak

A Bloomberg report said that the Reserve Bank of India (RBI), in its letter sent to the lender, barred it from onboarding new customers due to the leak of data to Chinese entities. Vijay Shekhar Sharma has denied such claims.

The report said while citing an anonymous source, “Annual inspections by the Reserve Bank of India found that the company’s servers were sharing information with China-based entities that indirectly own a stake in Paytm Payments Bank”.

No Mention of Data Leak, Although RBI Raised “Concerns” : Sharma

The RBI has raised same concerns, but did not mention of any purported data leak to foreign entities, said Sharma. He told CNBC TV18 that “The RBI in its letter did not raise concern over any leak of data to any entity outside of India…We have no server that is outside India, and no foreign national has any access to our servers”.

The RBI has not issued a statement over the controversy which has erupted over its letter sent to Paytm Payments Bank on March 11.

The Bloomberg report also said that the over the failure of verifying the customers through KYC norms, RBI has raised questions.

Sharma claimed that the UPI onboarding on Paytm Payments Bank has not been restricted. However, he refrained from giving the details of the concerns raised by RBI.

The bank also issued a clarification, apart from Sharma’s comments on the matter. The lender’s spokesperson said “The recent Bloomberg report on Paytm Payments Bank claiming data leak to Chinese firms is completely false and simply sensationalizing. Paytm Payments Bank is proud to be a completely homegrown bank and is fully compliant with RBI’s directions on data localisation. All of the Bank’s data resides within the country. We are true believers of the Digital India initiative, and remain committed to driving financial inclusion in the country.”

Paytm Payments Bank is a joint venture between Paytm, which owns 49 percent stake and Sharma who holds 51 percent. China’s e-commerce major Alibaba Group and its affiliate, Jack Ma’s Ant Group, own shares in Paytm as per the exchange filings.

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