The Financial Intelligence Unit of India (FIU-IND) has imposed a penalty of ₹5.45 crore on Paytm Payments Bank Ltd (PPBL) for failing to report suspicious transactions linked to money laundering.
The penalty follows an investigation into Paytm Payments Bank’s alleged failure to detect and report suspicious transactions, violating provisions of the Prevention of Money Laundering Act (PMLA).
FIU-IND’s scrutiny began after law enforcement agencies raised concerns about certain entities using PPBL accounts for illicit activities, including organizing and facilitating online gambling.
“The money generated from these illegal operations, i.e., proceeds of crime, was routed and channeled through bank accounts maintained by these entities with Paytm Payments Bank Ltd,” FIU-IND said in a statement.
The financial intelligence unit issued a Show Cause Notice to Paytm Payments Bank for violations related to Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Know Your Customer (KYC) safeguards, particularly concerning payout services and beneficiary account rules.
“The penalty pertains to issues within a business segment that was discontinued two years ago. Since then, we have enhanced our monitoring systems and reporting mechanisms to the FIU-IND,” a Paytm Payments Bank spokesperson said.
Earlier in January, the Reserve Bank of India (RBI) directed Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags, and other instruments after February 29, later extending the deadline to March 15, citing KYC and regulatory violations.
