India’s Financial Intelligence Unit (FIU) on Friday imposed a penalty of Rs. 5,49,00,000 ($662,565) on Paytm’s banking arm, Paytm Payments Bank, for violations in reporting unlawful cash routed by its accounts, the nation’s finance ministry mentioned.
The FIU initiated a evaluation of Paytm Payments Bank after data from regulation enforcement businesses about some entities engaged in unlawful acts, together with organising and facilitating on-line playing, and routing proceeds by the financial institution.
“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 ministry mentioned in an announcement.
The funds financial institution didn’t report suspicious transactions and conduct due diligence of these accounts, the FIU’s order mentioned.
Based on the “voluminous” materials out there on document, it discovered that the costs in opposition to Paytm Payments Bank had been substantiated, the ministry added.
The penalty pertains to points inside a enterprise section that was discontinued two years in the past, a spokesperson for Paytm Payments Bank mentioned. The firm has since enhanced its monitoring methods and reporting mechanisms to the FIU, the spokesperson added.
Earlier in February, the Reserve Bank of India (RBI) had requested Paytm Payments Bank to wind down operations by March 15 on account of persistent compliance points and supervisory issues.
Paytm had earlier mentioned that it obtained notices for data and explanations from the authorities, together with the monetary crime preventing company Enforcement Directorate, and was offering them the identical.
Meanwhile, Paytm has minimize some ties with its funds financial institution unit in an try to handle compliance issues that triggered a meltdown in its shares final month.
Paytm CEO Vijay Shekhar Sharma owns a 51 % stake in Paytm Payments Bank, whereas Paytm owns the remaining.
Earlier this week, Sharma stepped down as non-executive chairman and board member of the funds financial institution unit, as half of a significant overhaul.
© Thomson Reuters 2024
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