Paytm boss Vijay Shekhar Sharma arrested, later released on bail in February

Paytm founder and CEO Vijay Shekhar Sharma was arrested and later released on bail for ramming his car into DCP's car in February, sources said on Sunday.

According to media reports, the Paytm boss was driving a Jaguar land Rover (JLR) that hit the car of the district commissioner of police of South Delhi on February 22.

The incident allegedly happened outside The Mother's International School on Aurobindo Marg. Later Sharma was arrested under IPC Section 279 (rash or negligent driving). Constable Deepak Kumar filed an FIR who was driving DCP's car then.

Meanwhile, the Reserve Bank of India (RBI) has asked Sharma to stop opening new accounts amid "material supervisory concerns" observed in the bank.

This is the third time that Paytm Payments Bank is facing action from the banking regulator since its inception in May 2017. It has been prohibited from opening new accounts for the second time.

Sharma holds 51% stake in Paytm Payments Bank (PPBL), while the remaining 49% is held by Paytm.

The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida. As per the last disclosed numbers, PPBL had around 6.4 crore customers.

The RBI had in June 2018 too prohibited PPBL from onboarding new customers on account of supervisory concerns. The restrictions were lifted on December 31, 2018.

The central bank had also issued a show cause notice to the firm dated July 29, 2021, stating that Paytm Payments Bank had committed an offence under the Payment and Settlement Systems Act, 2007 by submitting false information to RBI confirming completion of the transfer of Bharat Bill Payment Operating Unit business by One97 Communications to PPBL.