ED Interrogates Paytm Payments Bank Executives, Acquires Documents Following RBI Action: Report

The central agency is currently conducting an initial assessment of documents to determine whether to initiate a formal investigation into the alleged irregularities flagged by the RBI

The Enforcement Directorate (ED) has reportedly interrogated senior executives of Paytm Payments Bank and obtained submissions of documents from them in response to the recent Reserve Bank of India (RBI) action, which prohibits Paytm Payments Bank Ltd from accepting deposits or top-ups in any customer account, according to a news agency PTI report on Thursday.

The central agency is currently conducting an initial assessment of documents to determine whether to initiate a formal investigation into the alleged irregularities flagged by the RBI at the fintech company under the Foreign Exchange Management Act (FEMA), as per the report.

“Some documents have been recently submitted by Paytm executives, following which they were asked certain questions. Some more information has been sought,” PTI sources stated.

It further stated that currently, no irregularities have been identified, and a case under FEMA will only be filed if any violations under the said law are found. Additionally, they mentioned that an investigation under the Prevention of Money Laundering Act (PMLA) involving Paytm has been ongoing for some time.

According to an exchange filing by the company on Wednesday, One97 Communications, which offers financial services under the Paytm brand, and its banking arm, Paytm Payments Bank, have received notices and requests for information regarding customers of the respective entities.

Paytm stated that its affiliate, Paytm Payments Bank Limited, does not engage in outward foreign remittances.

"One 97 Communications Limited (OCL), its subsidiaries and its associate, Paytm Payments Bank Limited, have over time been receiving notices and requisition for information, documents and explanations from the authorities, including Enforcement Directorate (ED), with respect to the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the authorities," Paytm said in a regulatory filing.

Paytm affirmed that both the company and its affiliate have consistently furnished information, documents, and explanations to the authorities as requested.

Earlier this month, the Enforcement Directorate and the Financial Intelligence Unit requested the RBI to share its report regarding the recent action taken to prohibit Paytm Payments Bank Ltd from accepting deposits or top-ups in customer accounts, reported PTI.

On January 31, the central bank directed Paytm Payments Bank to cease accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after February 29.