Financial Intelligence Unit imposes Rs 5.49 Cr penalty on Paytm Payments Bank

The Financial Intelligence Unit-India (FIU-IND) has imposed a fine of Rs 5.49 crore on Paytm Payments Bank Ltd over violations of the money laundering regulations, the Ministry of Finance said in a press release on late Friday.

“FIU-IND initiated a review of the Paytm Payments Bank Ltd on receipt of specific information from law enforcement agencies in respect of few entities and their network of businesses engaged in a number of illegal acts, including organising and facilitating online gambling,” the release added.

“Further, the money generated from these illegal operations, i.e. proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank Ltd.”

After considering the written and oral submissions of the PPBL, the FIU-IND found the charges against Paytm were substantiated. Consequently, it imposed a penalty of Rs 5.49 crore under section 13 of PMLA.

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)."

This morning, Paytm announced severing inter-company agreements between the company and Paytm Payments Bank Limited.

Earlier this week, Vijay Shekhar Sharma stepped down from his position as part-time non-executive chairman and board member of PPBL. The company also announced the reconstitution of its board of directors and plans to soon appoint a new chairman.

The developments come in the wake of the Reserve Bank of India (RBI) imposing a set of business restrictions on Paytm Payments Bank over non-compliance and regulatory concerns. The business restrictions are set to impact Paytm’s business verticals related to the payments bank, though the RBI has granted a few temporary reliefs.