The Financial Intelligence Unit-India has fined Paytm Payments Bank Rs 5.49 crore for violating anti-money laundering regulations.
According to a statement from the finance ministry on March 1, the investigation by the Financial Intelligence Unit began after law enforcement agencies flagged several entities engaged in illegal activities, including online gambling, and found that proceeds of crime were being channeled through bank accounts held by these entities with Paytm Payments Bank Ltd.
After reviewing evidence and submissions from Paytm Payments Bank Ltd, the Director of FIU-IND concluded that the charges against Paytm were valid.
A spokesperson for Paytm Payments Bank stated that the penalty relates to issues within a discontinued business segment from two years ago and highlighted improvements in monitoring systems and reporting mechanisms since then.
This announcement coincides with the board of parent company Paytm approving the discontinuation of various inter-company agreements with Paytm Payments Bank.
Paytm’s stock has plummeted since the RBI’s directive on January 31 to wind down Paytm Payments Bank’s operations due to regulatory concerns. Vijay Shekhar Sharma, the founder of Paytm, has resigned from the payments bank’s board.
Governor Shaktikanta Das remarked on February 8 that entities are given ample time to comply with regulations before regulatory action is taken.
The RBI did not provide an immediate response to inquiries about the penalty on Paytm Payments Bank.
