In a latest development, the Financial Intelligence Unit-India (FIU-IND) on Friday took a decisive action against Paytm Payments Bank Ltd for violations under the Prevention of Money Laundering Act (PMLA), 2002. Citing breaches of obligations outlined in the PMLA along with related rules and guidelines, FIU-IND has levied a significant penalty of Rs 5.49 crore on the institution.
The investigation into Paytm Payments Bank Ltd was initiated by FIU-IND following specific intelligence received from law enforcement agencies regarding illicit activities conducted by certain entities. These activities included facilitating online gambling and the subsequent laundering of proceeds through bank accounts maintained with Paytm Payments Bank Ltd.
Upon thorough examination of the evidence, FIU-IND issued a compliance show cause notice to the bank, highlighting violations related to payout services, anti-money laundering (AML), counter-terrorism financing (CFT), and know your customer (KYC) protocols.
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After considering both written and oral submissions from Paytm Payments Bank Ltd, the Director of FIU-IND concluded that the charges against the institution were substantiated. As a result, on February 15, 2024, in accordance with the powers vested under Section 13 of the PMLA, a penalty of Rs 5.49 crore was imposed.
According to the release by the government, this action underscores the commitment of regulatory authorities to combat financial crimes and ensure compliance within the banking sector. Paytm Payments Bank Ltd is expected to adhere to the prescribed regulations and take corrective measures to prevent future violations.
Meanwhile, Vijay Shekhar Sharma resigned from his position as part-time non-executive chairman of Paytm Payments Bank's board. The decision comes as the Reserve Bank of India (RBI) has prohibited PPBL from accepting deposits and credits from any customer beyond March 15 due to persistent non-compliances and ongoing material supervisory concerns within the bank.
Shares of One 97 Communications Ltd, the parent firm of Paytm, closed at Rs 425.45, up 5 per cent, on the BSE on Friday.