In fresh trouble for Paytm Payments Bank, the Financial Intelligence Unit (FIU) has slapped a penalty of Rs 5.49 crore on the digital bank for violating anti-money laundering law, the finance ministry said on Friday.
The Paytm Payments Bank Ltd (PPBL) has been in trouble after the Reserve Bank directed it to stop accepting fresh deposits from customers with effect from February 29 — a deadline which was later extended to March 15.
Earlier this week, Vijay Shekhar Sharma stepped down as part-time non-executive Chairman of PPBL and the board of the bank was reconstituted.
The Finance Ministry said FIU-India had initiated a review of Paytm Payments Bank on receipt of specific information from law enforcement agencies in respect of a few entities and their network of businesses engaged in illegal acts, including organising and facilitating online gambling.
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 Ltd, said the ministry.
The FIU had earlier issued a show cause notice under the Prevention of Money Laundering Act (PMLA) for violating various rules, including KYC safeguards in respect of payout services and beneficiary accounts.
“After considering the written and oral submissions of the Paytm Payments Bank Ltd, Director, FIU-IND, based on the voluminous material available on record, found that the charges against Paytm were substantiated.
“Consequently, vide order dated March 1 in exercise of his powers under Section 13, PMLA, it was found to be appropriate to impose a penalty of Rs 5.49 crore,” the ministry said.
A Paytm Payments Bank spokesperson 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 Financial Intelligence Unit (FIU),” the spokesperson added.
