India’s Payments Bank to resume taking on new customers

India's Payments Bank, which facilitates transactions on the Paytm mobile commerce platform, expects the central bank to resume taking on new customers in the next few months, a top executive told Reuters.

In March, the Reserve Bank of India ordered a comprehensive audit of the company's IT systems, citing material supervisory concerns, without elaborating further, and barring it from taking on new customers.

The bank is working with the IT audit to address the concerns of the regulator. Madhur Deora, group chief financial officer, Paytm, told Reuters on Sunday that the process is underway and that we think it should take three to five months from where we are right now.

The central bank didn't respond immediately to an email seeking comments. In March, a Bloomberg news report said that it had found its servers were sharing information with China-based entities that indirectly own a stake in the firm.

The company's affiliate, Ant Group, is backed by China's Alibaba Group Holding. One 97 Communications Ltd, the parent of Paytm, reported a wider fourth-quarter loss due to higher payment processing, marketing and employee costs.

The company was on track to reach profitability by September 2023, according to Deora. We are seeing good growth in high margin businesses and as a result we are seeing improvements in the contribution margin. He said our indirect expenses will not grow as fast as last year as we don't expect to make any significant investments in new businesses or employee cost this year, as we have already made those in the last year.

Paytm made its stock market debut in November last year in one of the country's largest initial public offering, but the shares have since sunk 70%.