Amid RBI action against the banking arm, Paytm declines to be subject to an ED inquiry

Amid RBI action against the banking arm, Paytm declines to be subject to an ED inquiry

The business said that it "categorically denies any investigation by the Enforcement Directorate" into allegations of money laundering made against Paytm, its partners, the founder, or the CEO.

Starting on February 29, the RBI prohibits Paytm Payments Bank from taking any new deposits.

The parent company of payments solutions provider Paytm, One97 Communications, made it clear on February 4 that neither the company nor any of its affiliated companies are the subject of an Enforcement Directorate (ED) inquiry.

This statement follows a day earlier rumors that, should suspicions of money laundering be discovered, the government financial crime fighting agency may launch an investigation into Paytm Payments Bank, the company's banking division.

In a regulatory statement, the fintech giant said that it "categorically denies the investigation by the Enforcement Directorate for criminal money laundering activities on OCL (One97 Communications Limited), our employees, and/or its Founder and CEO)."

According to Revenue Secretary Sanjay Malhotra, who spoke with news agency Reuters the day before, the ED may look into Paytm Payments Bank if any fresh claims of financial theft are discovered.

"If any fresh allegation of money laundering is a structure made against Paytm by the RBI, it will be investigated by the Enforcement Department as per the law of the land," Malhotra was said to have stated.

Notably, Paytm Payments Bank was instructed by the RBI on January 31 to cease taking new deposits and credit transactions as of February 29. Additionally, the lender will not be permitted to take top-ups on any client account, including NCMC cards, Fastag cards, wallets, or prepaid devices.

The RBI took action against Paytm Payments Bank in response to supervisory concerns and complaints of non-compliance.

The central bank said that continuous non-compliance and ongoing major supervisory issues at the bank necessitated additional supervisory action. These findings were found in a thorough system audit report and a subsequent compliance verification report by external auditors.

In a regulatory filing, Paytm refuted media reports that said the RBI action was related to money laundering. "Recent guidance

It is a component of RBI's continuous supervisory commitment and compliance procedure, the statement said.