Paytm rejects reports of money laundering, FEMA violation probes by ED

Fintech company Paytm on Monday dismissed the reports of the Enforcement Directorate investigating the firm or its founder for money laundering or FEMA violations as “misleading, baseless and malicious”.

Paytm founder and CEO Vijay Shekhar Sharma during an event in Mumbai, (PTI)(PTI)
Paytm founder and CEO Vijay Shekhar Sharma during an event in Mumbai, (PTI)(PTI)

Paytm said that the financial crime-fighting agency has not launched any probe against the parent brand One97 Communications or founder and CEO Vijay Shekhar Sharma, amid allegations of money laundering.

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This comes after the Reserve Bank of India issued a deadline to Paytm Payments Bank for halting its transactions after February 29.

Paytm said in a statement, “We would like to reiterate that the company and its associate Paytm Payments Bank Limited are not the subject matter of any such investigation. Such media reports are entirely misleading, baseless, and malicious, which harm the interests of all our stakeholders.”

In its statement, Paytm clarified that the ED has not launched any investigation against One97 Communications, its associates or top management. It also refuted claims of all alleged FEMA violations.

“We have since seen additional media reports making baseless speculations about investigations of the company or its associate Paytm Payments Bank Limited (PPBL) for violation of foreign exchange rules,” it said, adding that Paytm will continue to post such clarifications as required.

The company said, “To address recent misinformation, factual inaccuracies, and speculation, One97 Communications Limited (OCL, Paytm, or Company) would like to set out the company’s position and directly address rumours in the recent misleading media reports about the company. This filing is done in the interest of transparency and protecting our reputation, customers, shareholders, and stakeholders from being influenced by unwarranted and speculative stories. We will continue to post such clarifications as required.”

RBI crackdown against Paytm Payments Bank

The Reserve Bank of India recently issued a deadline to Paytm Payments Bank, ordering the company to stop all deposits or transactions after February 29 due to alleged violations of KYC regulations, raising concerns about money laundering.

Further, the banking regulatory body is also considering cancelling the operating permit of Paytm Payments Bank as early as March 2024. RBI said that the Paytm bank failed to abide by the minimum KYC rules for its account holders, with thousands of accounts registered under faulty documents.

Paytm Payments Bank has also been accused of multiple transactions beyond regulatory limits, raising money-laundering concerns. However, Paytm has reiterated that it abides by all the RBI rules and parameters set by the Government of India.

(With inputs from ANI)

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