Paytm Fights Back Against Money Laundering Allegations: Seeks Investigation

On Monday, Paytm, a fintech company, denied claims that the Enforcement Directorate was investigating the company or its founder for money laundering or FEMA violations as "misleading, baseless, and malicious.” The company stated that the financial crime-fighting agency has not begun an investigation into the parent brand One97 Communications or its founder and CEO, Vijay Shekhar Sharma, despite claims of money laundering. This comes after the Reserve Bank of India announced a deadline for Paytm Payments Bank to suspend transactions after 29 February.

The Fintech giant issued a statement stating, "We would like to reiterate that the company and its associate Paytm Payments Bank Limited are not the subject of any such investigation." Such media reports are completely inaccurate, false, and spiteful, and they hurt the interests of all our stakeholders." Paytm stated that the ED has not begun an inquiry against One97 Communications, its associates, or its top management. It also rejected all claimed FEMA infractions.

"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," adding that the company will continue to provide clarifications as needed.

RBI ban on Paytm Payments Bank

The Reserve Bank of India has issued a deadline to the Bank, ordering the business to suspend all deposits and transactions after 29 February owing to alleged KYC violations, raising fears about money laundering. Furthermore, the financial regulatory authority is considering terminating Paytm Payments Bank's operating permit as early as March 2024. The RBI stated that the bank needed to comply with the minimal KYC criteria for its account holders, with thousands of accounts established using flawed documents.

Paytm Payments Bank has also been accused of engaging in various transactions that exceeded legal limitations, raising worries about money laundering. However, Paytm has emphasised that it follows all RBI norms and limits established by the Government of India.