ED initiates probe against Paytm Payments Bank: Report

The Enforcement Directorate on Wednesday initiated preliminary inquiry against Paytm Payments Bank, Reuters quoted a CNBC TV 18 report on Wednesday. The action comes days after the Reserve Bank of India (RBI) barred the Paytm subsidiary from accepting new deposits from February 29.

The central agency’s move is a fresh setback to the Payments Back, especially after the RBI ruled out any review of its clampdown against the entity. “At the moment let me say very clearly there is no review of this (PPBL) decision. If your are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision,” RBI governor Shaktikanta Das had said.

ALSO READ: Paytm confirms exit of independent director Manju Agarwal. Know more about her

“We have always complied with the requirements dutifully,” Paytm told CNBC-TV18. The report has no further details on the probe.

Vijay Shekhar Sharma, founder and chairman of One97 Communications Ltd., operator of Paytm.(Bloomberg)
Vijay Shekhar Sharma, founder and chairman of One97 Communications Ltd., operator of Paytm.(Bloomberg)

Last week, news agency Reuters had reported that the ED was probing if Paytm and the Payments Bank were involved in FEMA violations.

The fintech major had denied reports of either the company or founder Vijay Shekhar Sharma being probed by the agency. “We have consistently assured that neither Paytm nor any of its associates are under investigation by any regulatory agency. This stance has been further validated by recent statements from senior government officials. Our commitment remains unwavering towards operating in compliance with regulatory guidance and continuously enhancing our processes to further the reach of digital payments across India,” the company had said in a statement.

Last week, Sharma had met both the RBI and finance minister Nirmala Sitharaman amid the crisis hitting the Payments Bank. Accorfing to reports, the minister told the Paytm CEO that the RBI action was a regulatory exercise and the government cannot help the company with. Even the central bank had refused to grant concession to Payments Bank.

“We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us would have to take action?” Das said last week.

Leave a Reply

Your email address will not be published. Required fields are marked *