Financial Intelligence Unit - India (FIU-IND) has imposed a substantial penalty of Rs 5,49,00,000 on Paytm Payments Bank Ltd for purported breaches of anti-money laundering regulations stipulated under the Prevention of Money Laundering Act (PMLA).
This enforcement action was initiated by FIU-IND in response to alleged infractions observed within the operations of Paytm Payments Bank Ltd, as outlined in the provisions of the PMLA.
A spokesperson representing Paytm Payments Bank acknowledged the penalty and clarified that it pertains to issues arising from a discontinued business segment dating back two years. The spokesperson further indicated that the bank has since enhanced its monitoring mechanisms and reporting frameworks to align with the requirements of the Financial Intelligence Unit (FIU).
The allegations against Paytm Payments Bank centered on purported violations of the PMLA and its associated regulatory frameworks, as well as directives issued by the Director of FIU-IND.
The investigation was triggered by intelligence provided by law enforcement entities concerning certain entities suspected of engaging in illicit activities, including online gambling, with the proceeds of such activities allegedly being laundered through accounts maintained with Paytm Payments Bank Ltd.
Following a thorough review of pertinent documentation, FIU-IND issued a notice to Paytm Payments Bank Ltd, citing breaches of various sections of the PML Rules about anti-money laundering (AML), counter-financing of terrorism (CFT), and know-your-customer (KYC) protocols for payout services and beneficiary accounts.
Subsequently, after due consideration of both written submissions and oral arguments presented by Paytm Payments Bank Ltd, the Director of FIU-IND determined that the allegations were well-founded. As a result, a penalty amounting to Rs 5,49,00,000 was imposed on the bank, consistent with the enforcement powers conferred upon FIU-IND by the PMLA.
The imposition of this penalty, totaling Rs 5,49,00,000, was deemed appropriate and was formalized through an official order dated February 15th, 2024, per the authority vested in FIU-IND under Section 13 of the PMLA.
