RBI’s Paytm crackdown: How Paytm Payments Bank came under central bank’s radar

Thousands of ‘Paytm Payments Bank’ accounts created improperly: Report

There were instances where the total value of transactions – running into crores of rupees, much beyond regulatory limits in minimum KYC pre-paid instruments raising money laundering concerns, PTI reported quoting sources.

In one instance, an account linked to one Permanent Account Number (PAN) was found to be operating more than 1,000 wallets, as per a report in Economic Times.

There were major irregularities in KYC, which exposed the customers, depositors, and wallet holders to serious risk.

Earlier Revenue Secretary Sanjay Malhotra told Reuters that ED will probe Paytm Payments Bank if any evidence of illegal activity is found.

“One 97 Communications Ltd and Paytm Payments Bank operate with the highest ethical standards. We can confirm that neither we nor OCL’s founder-CEO have been the subject matter of investigation by the Enforcement Directorate regarding money laundering,” a spokesperson for Paytm Payments Bank said, PTI reported.

RBI’s Paytm crackdown

In a major action against PPBL, the Reserve Bank of India earlier this week directed the lender to stop accepting deposits or top-ups in customer accounts, wallets, FASTags, and other instruments after February 29.

KYC irregularities in Paytm Payments Bank exposed customers to serious risk, leading to a sharp drop in One97 Communications Ltd shares. Following the RBI’s direction, shares of One97 Communications Ltd, which owns the Paytm brand, saw a sharp drop of 36% from January 31st to February 2nd, 2024.

Paytm’s founder and CEO, Vijay Shekhar Sharma, also posted about the functioning of the Paytm app and appreciated the support the company is getting.