Financial Intelligence Unit Imposes Heavy Penalty on Paytm Payments Bank

The Financial Intelligence Unit (FIU) has imposed a penalty of more than Rs 5 crore on the banking unit of troubled payment services company Paytm. The reason for this is the violations in reporting illegal money sent through the accounts of Paytm Payments Bank.

The FIU, under the finance ministry, has taken action against Paytm Payments Bank after receiving information from law enforcement agencies about some entities being involved in illegal activities, including online gambling, and routing the proceeds through the bank. Test In this regard, the Finance Ministry has said in a statement, “The money obtained from illegal activities was sent by these entities through their accounts in Paytm Payments Bank.” The FIU order states that Paytm Payments Bank did not report the suspicious transactions and due diligence of these accounts was not done.

Earlier, Paytm had said that it had received notices from authorities including the Enforcement Directorate to provide information and clarification. The Reserve Bank of India (RBI) has ordered the closure of this unit of Paytm. This decision was taken due to apprehensions about compliance. After this order of RBI Paytm There was a huge fall in the stock. According to a Reuters report, One 97 Communications, which runs Paytm, and its banking unit have mutually agreed to terminate various inter-company agreements. However, it has not been told which agreements have been terminated.

“As per the agreement, Paytm and Paytm Payments Bank will not engage in related party transactions,” said a source familiar with the company’s strategy. Paytm did not respond to an email sent by Reuters seeking comment. Paytm CEO Vijay Shekhar Sharma holds a 51 percent stake in Paytm Payments Bank. Paytm holds the rest. Last week, Sharma resigned as non-executive chairman and board member of the payments bank unit. RBI has asked Paytm Payments Bank to shut down its operations by March 15.

(This news has not been edited by the NDTV team. It has been published directly from the Syndicate feed.)