Financial Intelligence Unit Imposes Rs 5.49-Crore Fine On Paytm Payments Bank For Violating PMLA Norms

In a significant development, the Financial Intelligence Unit-India (FIU-IND) has taken decisive action against Paytm Payments Bank Ltd for violations under the Prevention of Money Laundering Act (PMLA), 2002. FIU-IND has imposed a substantial penalty of Rs 5.49 crore on the institution, citing breaches of obligations outlined in the PMLA and related rules.

The investigation into Paytm Payments Bank Ltd was initiated by FIU-IND based on specific intelligence received from law enforcement agencies regarding illicit activities, including online gambling and money laundering, facilitated through the bank.

Following a compliance show cause notice highlighting violations related to payout services, anti-money laundering (AML), counter-terrorism financing (CFT), and know your customer (KYC) protocols, FIU-IND concluded that the charges against the bank were substantiated. Consequently, a penalty was imposed on February 15, 2024, under Section 13 of the PMLA.

This action underscores regulatory authorities’ commitment to combating financial crimes and ensuring compliance within the banking sector. Paytm Payments Bank Ltd is expected to adhere to prescribed regulations and take corrective measures to prevent future violations.

In related news, Vijay Shekhar Sharma has resigned from his position as part-time non-executive chairman of Paytm Payments Bank’s board amid ongoing regulatory concerns. The Reserve Bank of India (RBI) has prohibited PPBL from accepting deposits and credits from customers beyond March 15 due to persistent non-compliances and supervisory concerns.

On Friday, shares of One 97 Communications Ltd, the parent company of Paytm, concluded trading at Rs 425.45 on the Bombay Stock Exchange (BSE), marking a rise of 5 percent.