The Delhi Police arrested Paytm founder Vijay Shekhar Sharma for allegedly ramming his car into the vehicle of South Delhi deputy commissioner of police (DCP) last month. The Paytm chief was released on bail the same day.

Sharma purportedly fled the scene soon after his Land Rover hit DCP Benita Marie Jaiker's vehicle near Mother's International School on Aurobindo Marg in Delhi on February 22. "Offending vehicle hit the car of the complainant from behind and fled away," the Delhi Police public relations officer told Fortune India via email.

Deepak Kumar, who was driving Jaiker's car, took down the number of the Land Rover. The police then filed an FIR for "rashness and negligent driving".

"On investigation, the offending vehicle was identified and its driver Vijay Shekhar Sharma was arrested after identification and released on bail," the police said.

Both the vehicles were impounded and mechanically inspected, they said, adding that the "investigation is in progress".

The Reserve Bank of India (RBI) on Friday ordered Paytm Payments Bank to stop onboarding of new customers with immediate effect citing certain "material supervisory concerns".

In its blog, Paym said it is taking immediate steps to comply with RBI directions. "PPBL remains committed to working with the regulator to address their concerns as quickly as possible. We shall notify when we recommence the opening of new accounts after obtaining RBI approval," the company wrote.

The banking unit of Paytm parent One97 Communications had received RBI's approval to operate as a scheduled payments bank in December last year.

The company clarified that its existing customers can continue to avail its services without interruption. "The savings of existing users in their PPBL account, their fixed deposits with partnered banks and the balance maintained in their Paytm Wallet, FASTag or Wallet Card and UPI services are completely safe and functional. Any new users coming to the Paytm app can create Paytm UPI handles, and link them to their existing PPBL account or to other bank accounts. However, new users can not, until further notice, sign up for new PPBL wallets or PPBL savings or current accounts," it added.

RBI has asked the bank to appoint an IT audit firm to conduct a comprehensive system audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing the report of the IT auditors, the regulator said.

This comes months after the central bank imposed a monetary penalty of ₹1 crore on Paytm Payments Bank for deficiencies in regulatory compliance.

In February, foreign brokerage Macquarie slashed its target price of Paytm stock to ₹700 citing profitability concerns and widening losses. The Vijay Shekhar Sharma-led company had reported a massive loss of ₹780 crore in the third quarter, led by large stock options cost of ₹390 crore.

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