Rs 5.49 crore fine imposed on Paytm Payments Bank for money laundering

Paytm Payments Bank has been fined ₹5.49 crore by the Financial Intelligence Unit (FIU) for allegedly participating in money laundering, according to a Ministry of Finance report. Regulations are anticipated to force Paytm Payments Bank to remedy the problem. This comes hours after One97 Communications said that the firm's board has discontinued the inter-company pacts with the lending service to reduce dependencies.

The finance ministry alleged that proceeds of crime were routed through bank accounts maintained with Paytm Payments Bank by entities engaged in illegal activities.

According to the ministry, the financial intelligence unit had initiated a review of the Paytm lender following information from law enforcement agencies with respect to few entities and their network of businesses engaged in a number of illegal acts that include organising and facilitating online gambling.

"The Financial Intelligence Unit-India (FIU-IND),... has imposed a monetary penalty of ₹5.49 crore on Paytm Payments Bank Ltd with reference to the violations of its obligations under the PMLA (Prevention of Money Laundering Act)," the ministry said in a statement. The FIU had passed its order imposing the penalty on February 15.

A 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)."

“The company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing a new Chairman,” One97 Communications had said in a regulatory filing.