Paytm says company, founder not being probed by ED for money laundering

On 31 January, the Reserve Bank of India (RBI) barred Paytm Payments Bank from accepting customer deposits after 29 February after an audit revealed “persistent non-compliances” and “continued material supervisory concerns”. Following this, shares of One97 Communications, the bank’s parent, fell 20% each on 1 and 2 February.

The regulatory curb came almost two years after the payments bank was restricted from onboarding new customers. Paytm Payments Bank is an associate company of listed One 97 Communications, which, as on 31 March 2023, held a 49% stake in the payments bank.

A Reuters report said on 3 February that India’s financial crime fighting agency will probe Paytm Payments Bank if any fresh charges of fund siphoning are found. The report quoted revenue secretary Sanjay Malhotra. Mint reported on 3 February that RBI cracked the whip on Paytm Payments Bank after it failed to shape up despite repeated warnings on falsified compliances, irregularities in KYC (know your customer) norms and related party transactions, citing a person aware of the development.

“In the past, certain merchants/users on our platforms have been subject to enquiries and on those occasions, we have always cooperated with the authorities. During any such investigations by the authorities on any set of merchants/users in the past, we have cooperated with them on these investigations,” One97 said in a statement on Sunday, adding that this has been previously disclosed to the stock exchanges.

“We have and continue to abide by Indian laws and take regulatory orders with utmost seriousness,” it said.

It added that there are other stories in various media, including social media, “which are spreading speculation and misinformation on the reasons for RBI action on Paytm Payments Bank”.

“The recent direction from RBI is a part of the ongoing supervisory engagement and compliance process. For this action, we refer our stakeholders to the official press release of RBI dated 31 January and not rely on unofficial sources,” it said.

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Published: 04 Feb 2024, 10:19 PM IST