Paytm Payments Bank Slapped With ₹5.49 Crore Penalty for Alleged Money Laundering

New Delhi: India’s Financial Intelligence Unit has imposed a hefty penalty of Rs 5.49 crore on Paytm Payments Bank for alleged involvement in money laundering activities. It is reported that illicit funds were being channelled through bank accounts maintained by the lender, with entities purportedly engaged in illegal ventures, including online gambling, being under scrutiny.

A spokesperson for Paytm Payments Bank addressed the issue, stating that the penalty relates to a discontinued business segment from two years ago. They emphasized the enhancements made in monitoring systems and reporting mechanisms to the Financial Intelligence Unit since then.

Earlier, on January 31, the Reserve Bank of India directed PPBL to halt most banking services by February 29, a deadline later extended to March 15. This development coincided with Paytm’s announcement of scaling back business ties with its banking affiliate, aiming to address regulatory concerns for a clearer demarcation between the two entities.

The Paytm group, led by billionaire Vijay Shekhar Sharma, is working towards establishing a distinct separation between Paytm and its closely regulated banking arm. To support this, Paytm stated its intent to simplify the shareholders agreement for Paytm Payments Bank Ltd., which operates independently from the publicly traded mobile wallet pioneer.