Money laundering considerations and questionable dealings of tons of of crores of rupees between standard pockets Paytm and its lesser-identified banking arm had led Reserve Bank of India to clamp down on tech poster boy Vijay Shekhar Sharma-run entities, sources mentioned.
Also Read: Paytm FASTag Users Need To Buy New FASTag After February 29? “Don’t Worry” Says Company
The central financial institution has ordered Paytm Payments Bank Ltd (PPBL) to halt most of its enterprise together with taking additional deposits, conducting credit score transactions and finishing up prime-ups on any buyer accounts, pay as you go devices, wallets, and playing cards for paying highway tolls after February 29.
This means prospects can entry their current deposits and pay for companies with cash saved of their wallets until February 29. And in case, RBI doesn’t relent, prime-up for Paytm pockets will cease and transactions by way of it could not might be carried.
In a serious motion towards PPBL, the Reserve Bank earlier this week directed the lender to cease accepting deposits or prime-ups in buyer accounts, wallets, FASTags and different devices after February 29.
The PPBL, sources mentioned, had lakhs of non-KYC (Know Your Customer) compliant accounts and in hundreds of circumstances single PANs have been used for opening a number of accounts.
There have been cases the place the whole worth of transactions – operating into crores of rupees, a lot past regulatory limits in minimal KYC pre-paid devices elevating cash laundering considerations, sources mentioned.
According to an analyst, Paytm Payments Bank has about 35 crore e-wallets. Of this, about 31 crore are dormant whereas solely about 4 crore could be operative with both no stability or a small stability.
An unusually excessive variety of dormant accounts are vulnerable to have been used as mule accounts.
So, there have been main irregularities in KYC, which uncovered the shoppers, depositors and pockets holders to severe threat.
Sources mentioned the RBI in 2021 detected severe KYC Anti Money Laundering violations and the financial institution was directed to handle these deficiencies. However, they continued to persist.
The compliances submitted by the financial institution have been discovered to be incomplete and false on many events, sources mentioned.
Accordingly, in March 2022, RBI imposed supervisory restriction on PPBL to cease on-boarding new prospects with instant impact and to nominate an exterior audit agency to conduct a complete system audit.
There are a number of circumstances the place the accounts and wallets have been frozen by numerous regulation enforcement companies throughout the nation as such accounts have been used for committing digital frauds.
As a part of a clear-up train, the Enforcement Directorate (ED) in September 2022 had carried out raids on the premises of PPBL and its father or mother entity One97 Communications Ltd (OCL) and different fee aggregators.
The ED had initiated a probe below the legal sections of the Prevention of Money Laundering Act (PMLA) after a lot of cases of gullible debtors ending their lives got here to the fore from numerous states.
It was alleged that the unlawful digital mortgage firms sourced all private information of the mortgage-taker on the time of downloading these apps on their telephones.
The company had mentioned the alleged proceeds of crime within the case have been routed by way of e-wallets and another fee aggregators.
When contacted, a PPBL spokesperson mentioned, ”We can affirm that neither we nor One97 Communications Ltd’s founder-CEO have been the subject material of investigation by the Enforcement Directorate concerning cash laundering.” Occasionally, some retailers on the platforms have been the topic of inquiries, and the corporate cooperate totally with authorities in such cases, the spokesperson mentioned.
According to a senior authorities official, ED would additional probe cash laundering allegations going ahead if required.
Following the RBI’s course, shares of One97 Communications Ltd, which owns Paytm model, slumped 40 per cent within the final two days. The inventory tanked 20 per cent to Rs 487.05, its lowest buying and selling permissible restrict for the day, on the BSE on Friday.
In two days, the corporate’s market capitalisation (mcap) eroded by Rs 17,378.41 crore to Rs 30,931.59 crore.
(This story has not been edited by News18 employees and is revealed from a syndicated information company feed – PTI)
