Paytm Payments Bank, which was banned last week by the Reserve Bank of India (RBI) from onboarding new customers, has denied a media report accusing it of leaking data to Chinese firms.

News agency Bloomberg had reported that the RBI had found the company's servers sharing information with China-based entities that indirectly own a stake in the Paytm payments bank.

Paytm Payments Bank, which processes transactions for digital payments giant Paytm, said today that the report “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," the company said.

On Friday, the RBI had directed Paytm to stop enrolling new customers and ordered a comprehensive system audit of its IT systems, citing "certain material supervisory concerns observed in the bank".

RBI had said it will allow Paytm Bank to onboard new customers subject to specific permission after reviewing the IT auditor's report.

Paytm founder and CEO Vijay Shekhar Sharma owns 51% stake in Paytm Payments Bank, while Paytm parent One97 Communications holds the rest.

Paytm made its debut in the bourses in November last year in the country's biggest-ever initial public offering (IPO).

Paytm shares have fallen more than 68% to Rs 680.40 from its issue price of Rs 2,150.