Paytm Payments Bank fined ₹5.49 crore for money laundering - Hindustan Times

Paytm Payments Bank fined 5.49 crore for money laundering, says finance ministry: Report

Mar 01, 2024 07:53 PM IST

Financial Intelligence Unit on Friday imposed ₹5.49 crore penalty on Paytm Payments Bank for money laundering

Financial Intelligence Unit on Friday imposed 5.49 crore penalty on Paytm Payments Bank for money laundering, PTI quoted the ministry of finance as saying. The action is a fresh blow to the lender after the Reserve Bank of India on January 31 had barred it from accepting new deposits from February 29, later extending it to March 15.

This comes hours after One97 Communications said that the firm's board has discontinued the inter-company pacts with the lending service to reduce dependencies.

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The finance ministry alleged that proceeds of crime were routed through bank accounts maintained with Paytm Payments Bank by entities engaged in illegal activities.

According to the ministry, the financial intelligence unit had initiated a review of the Paytm lender following information from law enforcement agencies with respect to few entities and their network of businesses engaged in a number of illegal acts that include organising and facilitating online gambling.

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Vijay Shekhar Sharma, founder and chairman of One97 Communications Ltd., operator of Paytm.(Bloomberg)
Vijay Shekhar Sharma, founder and chairman of One97 Communications Ltd., operator of Paytm.(Bloomberg)

"The Financial Intelligence Unit-India (FIU-IND),... has imposed a monetary penalty of 5.49 crore on Paytm Payments Bank Ltd with reference to the violations of its obligations under the PMLA (Prevention of Money Laundering Act)," the ministry said in a statement. The FIU had passed its order imposing the penalty on February 15.

A Paytm Payments Bank spokesperson said,"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)."

On February 27, Vijay Shekhar Sharma had resigned as part-time non-executive chairperson of Paytm Payments Bank ahead of the March 15 deadline. The Paytm lending service had reconstituted its board of directors, appointing ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal.

“The company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing a new Chairman,” One97 Communications had said in a regulatory filing.

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