themwhats nextover the next few days paytm payments bank will submit to the regulator for its approval several names as potential audit candidates and the regulator may finalise the terms of reference based on its findings that include a series of lapses in meeting the know your customer kyc norms reported economic timesthe payments bank did not plug the gaps in the system even after repeated relevant references by the regulator there were consistent deficiencies found in the banks kyc process like accounts that needed a full kyc were not done reported et citing a source data from the payments bank was also flowing to the wallet operator which was not quite a watertight compartment and against central bank rules all in all compliance was either pending or unsatisfactorywhat does this mean for the companys small finance bank licencerbis regulatory order is a major blow to paytms plans of converting itself into a smallfinance bank as it was looking to apply for the licence in august this year one of the plus points for a small finance bank sfb is that they can lend unlike payment banks who have a tough business modelmacquarie in its report on one97 communications has said that the ban may not have a substantial impact on the listed fintechs business but it will have a significant impact on its brand and could be a speedbump in its plans to convert its payments bank licence into a small finance bank licence rbi guidelines allow payments bank to convert into an sfb after the completion of the first 5 years paytm is completing the 5year period in june this year but the latest rbi order means it might just have to wait a little bit longer