New Delhi: Financial Intelligence Unit-India (FIU-IND) has imposed a fine of Rs 5.49 crore on Paytm Payments Bank over alleged money laundering, following information from law enforcement agencies regarding illegal activities, including online gambling.
The FIU-IND revealed that some entities routed funds through Paytm Payments Bank, violating provisions of the Prevention of Money Laundering Act (PMLA).
The FIU-IND stated, "The money generated from these illegal operations, i.e., proceeds of crime were routed and channeled through bank accounts maintained by these entities with Paytm Payments Bank Ltd."
A spokesperson for Paytm Payments Bank noted that the penalty relates to issues within a discontinued business segment two years ago. The bank has since improved monitoring systems and reporting mechanisms to the FIU.
This development comes a month after the Reserve Bank of India (RBI) directed Paytm to halt accepting fresh deposits in its accounts or wallets, with a deadline initially set for February 29 and later extended to March 15. Paytm had shifted its nodal account to Axis Bank following the RBI order.
The RBI clarified that after March 15, no further deposits, credit transactions, top-ups, or recharging of FASTags through Paytm Payments Bank would be allowed. Customers can still withdraw or use existing funds in their accounts and wallets but cannot add fresh funds after the specified date.
Paytm Payments Bank holds a significant share in India's toll collections through FASTag, and the penalty adds to the challenges faced by the fintech giant.