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ED has not yet found forex breaches at Paytm unit, source says

Economic Times

Economic Times · 1y ago

ED has not yet found forex breaches at Paytm unit, source says

India's financial crime fighting agency, the Enforcement Directorate, has not found any breaches related to possible foreign exchange violations at Paytm Payments Bank. The investigation did uncover some lapses in verifying user profiles and the absence of suspicious transaction reports. The agency is still determining whether to charge Paytm for any potential violations. Paytm's shares have plummeted over 50% since the Reserve Bank of India's announcement regarding its inability to accept new funds. Paytm recently secured a 15-day extension for its wind-down, signed a partnership with Axis Bank, and analysts see the banking partnerships as positive for the company's business.

Related News

Paytm Bank gets a knock on the door from ED

Livemint

Livemint · 1y ago

Paytm Bank gets a knock on the door from ED

India's Directorate of Enforcement (ED) is conducting a preliminary inquiry into potential breaches at Paytm Payments Bank, following a referral from the Reserve Bank of India (RBI). The ED, known for investigating money laundering and forex violations, has not yet registered an enforcement case. The RBI and ED are currently the only entities involved, with the government refraining from interference. The ED will assess the concerns raised by the RBI and address any deficiencies found. Compliance breaches generally fall under the purview of sectoral regulators.

No Foreign Remittance License, So No Question Of Forex Laws Breach: Paytm Payments Bank To ED

Inc42 · 1y ago

No Foreign Remittance License, So No Question Of Forex Laws Breach: Paytm Payments Bank To ED

Paytm Payments Bank has informed the Enforcement Directorate (ED) that it does not have the necessary license for outward foreign remittances. The ED has reached out to the Reserve Bank of India (RBI) to verify this statement. The ED is investigating alleged breaches of the Foreign Exchange Management Act (FEMA) involving entities using Paytm Payments Bank. However, after reviewing the data provided by the RBI, the ED has not found any evidence of FEMA violations by Paytm. The RBI has also instructed the National Payments Corporation of India (NPCI) to examine Paytm's request to become a third-party application provider for UPI payments.

Paytm Payments Bank Does Not Undertake Foreign Remittances: Paytm On Report Of FEMA Violations

Inc42 · 1y ago

Paytm Payments Bank Does Not Undertake Foreign Remittances: Paytm On Report Of FEMA Violations

Paytm has clarified that its banking unit, Paytm Payments Bank, does not undertake outward foreign remittances, in response to reports of the Enforcement Directorate (ED) registering a case of forex violations against the company. Paytm also stated that it continues to cooperate with authorities by providing information and documents as required. The ED had sought information on previous overseas transactions conducted by Paytm Payments Bank during a preliminary examination. Paytm's shares have plummeted to a record low following regulatory actions from the Reserve Bank of India.

Paytm parent confirms ED action

Livemint

Livemint · 1y ago

Paytm parent confirms ED action

Paytm's parent company, One97 Communication Ltd, has confirmed receiving notices from the Enforcement Directorate (ED) requesting information on customers who have conducted business with its group companies. Paytm has provided the necessary information and documents to the investigating agency. This comes after reports that the ED is probing suspected breaches at Paytm Payments Bank based on a referral from the Reserve Bank of India. The ED is currently verifying the information and no formal complaint has been lodged yet. The restrictions imposed by RBI on Paytm Payments Bank remain in place.

No Respite For Paytm: Shares Tank 5% To Touch Fresh 52 Week-Low

Inc42 · 1y ago

No Respite For Paytm: Shares Tank 5% To Touch Fresh 52 Week-Low

Paytm shares continue to decline, hitting a 52-week low as brokerage firm Macquarie lowers its price target. The Reserve Bank of India (RBI) has reportedly asked the Enforcement Directorate (ED) to investigate alleged breaches at Paytm Payments Bank. Paytm's shares have dropped nearly 55% in the past month due to regulatory issues. The RBI has barred Paytm Payments Bank from certain activities, and the company has clarified that it does not undertake outward foreign remittances. Macquarie downgraded One97 Communications and lowered its price target.

Paytm’s forex woes: Understanding the role of fintechs in cross-border payments

Economic Times

Economic Times · 1y ago

Paytm’s forex woes: Understanding the role of fintechs in cross-border payments

Digital payments giant Paytm is under investigation by the Directorate of Enforcement (ED) for foreign exchange violations by some of its merchants. Paytm responded by stating that it is not authorized by the Reserve Bank of India (RBI) to deal in forex, and therefore cannot be in violation. The article discusses the categories of entities authorized to deal in forex in India, such as banks (AD-I) and non-banks (AD-II). Fintechs play a role as facilitators of cross-border money flow, working with AD-I banks. The RBI has issued guidelines for payment aggregators operating in this space, including requirements for governance, customer redressal, and minimum net worth.

At ₹376, Paytm shares hit upper circuit for third straight session

Thehindubusinessline

Thehindubusinessline · 1y ago

At ₹376, Paytm shares hit upper circuit for third straight session

Shares of One97 Communications, the parent company of Paytm, surged 5% for the third consecutive session after the Directorate of Enforcement (ED) found no breaches of foreign exchange rules in its probe into Paytm Payments Bank. However, the central agency did identify lapses in KYC norms and suspicious transaction reporting. The news follows the ED's formal initiation of an investigation into alleged violations of foreign exchange rules by Paytm Payments Bank. Shares of One97 Communications have been impacted by regulatory scrutiny related to its payments bank business.

FIU, ED Seek Report From RBI On Paytm

OutlookIndia

OutlookIndia · 1y ago

FIU, ED Seek Report From RBI On Paytm

The Enforcement Directorate (ED) and the Financial Intelligence Unit (FIU) have requested the Reserve Bank of India (RBI) to share a report on the recent action taken against Paytm Payments Bank Ltd. The ED is looking to analyze if a probe needs to be initiated, while the FIU wants to assess if Paytm followed the required procedures under the Prevention of Money Laundering Act. The RBI had barred Paytm Payments Bank from accepting customer deposits or top-ups, but Paytm denies any wrongdoing and claims they are not under investigation for money laundering or foreign exchange violations.

Paytm Falls 3% After Hitting Upper Circuit For Four Sessions

Inc42 · 1y ago

Paytm Falls 3% After Hitting Upper Circuit For Four Sessions

Shares of One97 Communications, the parent company of Paytm, declined by 3.74% to INR 380.45 following a 'neutral' rating and lowered target price by Goldman Sachs. The rating cut reflects concerns about potential market share loss in the payments sector after the RBI imposed strict restrictions on Paytm Payments Bank. Analysts at Goldman Sachs have reduced revenue and adjusted EBITDA estimates for FY24E-26 by up to 36% and 80% respectively, predicting a 21% decline in FY25 revenues. However, the recent positive developments, including RBI extending the business restrictions deadline and news of relocating the nodal account to Axis Bank, gave a boost to shareholder optimism. Investigations on possible foreign exchange violations by the Enforcement Directorate have not yet found any breaches.

Paytm Touches Upper Circuit In Fourth Straight Session; Shares Near INR 400 Mark

Inc42 · 1y ago

Paytm Touches Upper Circuit In Fourth Straight Session; Shares Near INR 400 Mark

Paytm shares have seen a positive turnaround after a sharp decline due to the Reserve Bank of India's (RBI) crackdown on Paytm Payments Bank. RBI extended the deadline on the bank's business restrictions, and Paytm announced shifting its nodal account to Axis Bank, providing some optimism. Paytm shares gained 21.5% since Friday, and several brokerages view the regulatory actions as restricted to the Paytm Payments Bank entity, expecting limited long-term impact on the overall business. However, there are concerns regarding potential declines in payment GMV and the impact on payment processing margin. The Enforcement Directorate's investigation into possible foreign exchange violations has not found any breaches so far.

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