Paytm refutes reports of data leak to Chinese firms, calls it ‘false and sensationalist’

NEW DELHI: Paytm Payments Bank on Monday refuted reports of leaking data to Chinese firms and termed them to be “false and sensationalist”.
The statement comes after the Reserve Bank of India (RBI) on March 11 barred it from onboarding new customers.
The company assured customers that it is fully compliant with the data localisation rules of the Reserve Bank of India and the entire data of the bank resides in the country.
In a tweet, Paytm Payments Bank said: “A recent Bloomberg report claiming data leak to Chinese firms is false and sensationalist. 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.”

In a report, news agency Bloomberg had said that annual inspections by RBI found that Paytm Payments Bank’s servers were sharing information with China-based entities that indirectly own a stake in the firm.
Paytm is backed by China’s Alibaba Group Holding and its affiliate Ant Group.
The Reserve Bank had also ordered a comprehensive audit of the company’s IT systems, citing “material” supervisory concerns observed in the bank, without elaborating further.
In response, Paytm Payments Bank had assured its users that it is taking immediate steps to comply with RBI directions, including appointment of a reputed external auditor to conduct a comprehensive audit of its IT systems.

“PPBL remains committed to working with the regulator to address their concerns as quickly as possible,” it said in a statement.
It also said that new users can sign up on the Paytm app, and transact by a) creating UPI handles and linking them to their bank accounts, or b) by using third party payment instruments, for transactions on the Paytm app.
“Users can not, until further notice, sign up for new PPBL wallets or PPBL savings or current accounts. Paytm believes that the measures imposed upon PPBL will not materially impact Paytm’s overall business,” the statement added.
However, the reports spooked investor sentiments as shares of One97 Communications — the parent company of Paytm — tanked nearly 13 per cent in today’s trade on the BSE. It touched an all-time low of Rs 672 during the day, but parred some losses and finally closed at Rs 675 on the BSE.
Currently, the stock is trading 65 per cent down from its all-time high of Rs 1,961.05 while on a year-to-date basis the stock is down 49 per cent.
(With inputs from agencies)