Paytm bank fined ₹5.5 cr over money laundering

1 March 2024 

AMONTH AFTER the Reserve Bank of India(RBI) directed Paytm Payments Bank (PPBL) to not accept fresh deposits or give credit, the Financial Intelligence Unit-India (FIU-IND) on PPBL on receipt of specific information from Friday imposed apenalty of Rs5.5 crore on  PPBL For violating money laundering norms. FIU-IND, the financial intelligence arm of the depart men to revenuer, initiated are view of PPBL on receipt of specific information fromlaw enforcement agencies inrespec to ffewe ntitiesand their network of businesses engaged in an umber of illegal acts, including organising and facilitating online gambling.  “The money generated from these illegal operations, that is, the proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank, ”a notification from the finance ministry said on Friday. After considering the written and oral submissions of the payments bank,FIU-IND found that the charges against it were substantiated. “The penalty pertains to issues within a business segment that was discontinued two years ago. Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU),”a spokesperson from Paytm said in response to the notification. On January 31, RBI asked the payments’ Bank to halt most of its operations after February 29. Subsequently, this deadline was extended to March 15.“The Comprehensive System Audit report and subsequent compli ance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” the notification had said. In2022,thecentralbankhad asked the payment sbank to stop on boarding new customers. Paytm bank fined X5.5 crore over money laundering PAYTM PAYMENTS BANK is an associate of One97 Communications, which owns the Paytm brand name .In 2022-23 (April-March) the payments bank posted a net profit of 5.7 crore and a revenue of nearly 32,357 crore. Earlier this month, One97 Communications had clarified that neither the company, nor founder and CEO Vijay Shekhar Sharma are being investigated by the Enforcement Directorate (ED) for violation of money laundering norms. “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,” the filing said.