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Paytm Payments Bank failed to put apparatus for detecting, reporting suspicious transactions under PMLA: FIU

Economic Times

Economic Times · 1y ago

Paytm Payments Bank failed to put apparatus for detecting, reporting suspicious transactions under PMLA: FIU

Paytm Payments Bank has been fined Rs 5.49 crore by the Financial Intelligence Unit (FIU) for its failure to detect and report suspicious transactions as required under anti-money laundering laws. The FIU found that the bank did not conduct due diligence of its payout service. Paytm Payments Bank has faced legal troubles recently, including being directed by the Reserve Bank to stop accepting fresh deposits. The FIU's investigation into the bank began in 2020 after reports of extensive illegal activities connected to Paytm were discovered, including online gambling and fraudulent services.

Related News

After RBI’s Paytm Clampdown, More Payments Bank Under Lens On KYC Worries

Inc42 · 1y ago

After RBI’s Paytm Clampdown, More Payments Bank Under Lens On KYC Worries

The Financial Intelligence Unit (FIU) has identified around 50,000 accounts without proper KYC verification in various payment banks in India, potentially involved in suspicious transactions and money laundering activities. These banks, including Paytm Payments Bank, are under scrutiny by the Reserve Bank of India (RBI) for failures such as not reporting suspicious transactions, lack of beneficial owner details, and registration of multiple users with a single PAN. The FIU is expected to provide a comprehensive report on these deficiencies before the end of March.

After Six-Year Battle, PayPal Registers With FIU Under Anti Money Laundering Law

Inc42 · 1y ago

After Six-Year Battle, PayPal Registers With FIU Under Anti Money Laundering Law

US-based online payment gateway PayPal has registered with the Financial Intelligence Unit of India (FIU) after a six-year legal battle. PayPal has become a reporting entity under the Prevention of Money Laundering Act (PMLA) and has appointed a principal officer to communicate with the FIU. The FIU is responsible for processing and analysing information on suspicious financial transactions. In December 2020, PayPal was fined INR 96 Lakh by the anti-money laundering agency for non-compliance with the PMLA. The Delhi High Court later overturned the penalty and ruled that PayPal is a payment system operator and must follow reporting obligations under the PMLA.

Now, Paytm Payments Bank Slapped With INR 5.49 Cr Penalty For Violating Money Laundering Norms

Inc42 · 1y ago

Now, Paytm Payments Bank Slapped With INR 5.49 Cr Penalty For Violating Money Laundering Norms

The Financial Intelligence Unit-India (FIU-IND) has imposed a penalty of INR 5.49 crore on Paytm Payments Bank for violations of the Prevention of Money Laundering Act (PMLA). The FIU-IND initiated a review of Paytm Payments Bank after receiving information about entities involved in illegal activities, including online gambling. The funds generated from these illegal operations were channeled through bank accounts maintained by these entities with Paytm Payments Bank. The charges against Paytm were substantiated based on available evidence and the bank's submissions.

Paytm Payments Bank | Latest & Breaking News on Paytm Payments Bank | Photos, Videos, Breaking Stories and Articles on Paytm Payments Bank

Money Control

Money Control · 1y ago

Paytm Payments Bank | Latest & Breaking News on Paytm Payments Bank | Photos, Videos, Breaking Stories and Articles on Paytm Payments Bank

Paytm Payments Bank has been in the news lately due to various issues surrounding its license and compliance with regulations. According to the Financial Intelligence Unit, the bank failed to implement a mechanism to detect and report suspicious transactions as required under the PMLA. Speculations over the revoking of Paytm Payments Bank's license have caused its stock to fall. Additionally, the controversy has led to a drop in Paytm's UPI market share. The bank has been fined for violating the PMLA. Despite efforts to cut ties with the bank, Paytm still relies on it in multiple ways. The board of Paytm's parent company has approved the termination of agreements with Paytm Payments Bank. Various financial changes, including restrictions on Paytm Payments Bank accounts, may impact users. Paytm's stock has been in decline and Yes Bank has expressed interest in acquiring the merchant accounts of Paytm Payments Bank. Paytm's efforts to resolve the issues with the regulator are seen as a delay tactic. A Paytm employee committed suicide due to fears of job loss. The board of Paytm Payments Bank has been restructured and the bank has faced various restrictions and an extended deadline for compliance. Despite setbacks, merchant loyalty to Paytm remains intact. Paytm's stock has shown some recovery but Goldman Sachs has reduced its target price. The decline in daily downloads of the Paytm app has been noted, while rival BHIM UPI has seen an increase. Overall, Paytm Payments Bank is facing significant challenges and uncertainties.

Paytm Payments Bank Failed To Set Up Mechanism To Detect, Report Suspicious Transactions: FIU-IND

Inc42 · 1y ago

Paytm Payments Bank Failed To Set Up Mechanism To Detect, Report Suspicious Transactions: FIU-IND

Paytm Payments Bank has been fined ₹5.49 crore ($731,000) by the Financial Intelligence Unit-India (FIU-IND) for failing to detect and report suspicious transactions as required by anti-money laundering laws. The agency also highlighted the bank's inadequate due diligence with respect to its payout service. The penalty was imposed amid an ongoing regulatory clampdown on the payments bank following extensive illegal activity conducted by a group of businesses connected to a foreign state. Paytm Payments Bank, a unit of Paytm, is set to shut down its banking operations due to a separate regulatory crackdown by the Reserve Bank of India.

Money laundering suspected: More payment banks under scanner

Economic Times

Economic Times · 1y ago

Money laundering suspected: More payment banks under scanner

The Financial Intelligence Unit (FIU) has identified approximately 50,000 payment bank accounts in India that lack proper know-your-customer (KYC) verification, leading to suspicions of money laundering activities. While around 30,000 of these accounts are associated with payment banks other than Paytm Payments Bank, the Reserve Bank of India (RBI) is currently investigating the issue. The lapses include failure to report suspicious transactions, lack of beneficial owner details, and registering multiple users with a single PAN. The FIU will submit a comprehensive report on the deficiencies before March 31st.

PayPal registers with FIU under anti-money laundering law; ends six-year long battle

IndianStartupNews

IndianStartupNews · 1y ago

PayPal registers with FIU under anti-money laundering law; ends six-year long battle

PayPal has officially registered with India's Financial Intelligence Unit (FIU) after a six-year legal dispute. The registration aligns PayPal with the Prevention of Money Laundering Act (PMLA) and requires the company to monitor and report suspicious transactions and cross-border wire transfers. In response to the regulatory framework set by the Reserve Bank of India (RBI), PayPal has appointed a principal officer and is in the process of appointing a director. The registration allows PayPal to share reports of suspicious transactions to aid in combating money laundering and financial crimes.

Paytm Payments Bank slapped with Rs 5.49 Cr fine for flouting money laundering norms

Entrackr

Entrackr · 1y ago

Paytm Payments Bank slapped with Rs 5.49 Cr fine for flouting money laundering norms

The Financial Intelligence Unit-India (FIU-IND) has imposed a fine of Rs 5.49 crore on Paytm Payments Bank Ltd over violations of the money laundering regulations, the Ministry of Finance said in a press release on late Friday. “FIU-IND initiated a review of the Paytm Payments Bank Ltd on receipt of specific information from law enforcement agencies in respect of few entities and their network of businesses engaged in a number of illegal acts, including organising and facilitating online gambling,” the release added. “Further, the money generated from these illegal operations, i.e. proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank Ltd.” After considering the written and oral submissions of the PPBL, the FIU-IND found the charges against Paytm were substantiated. Consequently, it imposed a penalty of Rs 5.49 crore under section 13 of PMLA. Paytm Payments Bank spokesperson said, ”The penalty pertains to issues within a business segment that was discontinued two years ago. Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU).” This morning, Paytm announced severing inter-company agreements between the company and Paytm Payments Bank Limited. Earlier this week, Vijay Shekhar Sharma stepped down from his position as part-time non-executive chairman and board member of PPBL. The company also announced the reconstitution of its board of directors and plans to soon appoint a new chairman. The developments come in the wake of the Reserve Bank of India (RBI) imposing a set of business restrictions on Paytm Payments Bank over non-compliance and regulatory concerns. The business restrictions are set to impact Paytm’s business verticals related to the payments bank, though the RBI has granted a few temporary reliefs.

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.

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