 "FIU imposes Rs 5.49 cr penalty on Paytm Payments Bank for PMLA violations")
The Financial Intelligence Unit-India (FIU), a branch of the finance ministry’s revenue department, levied a Rs 5.49 crore penalty on Paytm Payments Bank on Friday, in connection with alleged violations under the Prevention of Money Laundering Act (PMLA), read with PML rules.
Following the development, a spokesperson for Paytm Payments Bank 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 FIU.”
The FIU began a review of Paytm Payments Bank after receiving specific information from law enforcement agencies about a few entities and their network of businesses being involved in various illegal activities, including the organisation and facilitation of online gambling, the finance ministry said in a statement.
“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,” the statement further said.
Upon reviewing the documents, the FIU issued a compliance show-cause notice to the payments bank for the alleged violations of PML rules, including KYC safeguards with respect to payout services and beneficiary accounts.
The press statement said: “After considering the written and oral submissions of Paytm Payments Bank, director, FIU-IND, based on the voluminous material available on record, found that the charges against Paytm (PB) were substantiated.”
The FIU action follows the RBI's January 31 directive barring Paytm Payments Bank from accepting fresh deposits or credits in the accounts of its customers from February 29. The date was later extended to March 15.