The Financial Intelligence Unit of India (FIU-IND) imposed a penalty of Rs 5.49 crore on Paytm Payments Bank Ltd for violations of money laundering laws.
The Financial Intelligence Unit reviewed beleaguered payments bank after receiving information from law enforcement agencies about paytm bank accounts were involved in organising and facilitating online gambling payments. The illicit gambling payments were routed and channelled through bank accounts maintained with the Paytm Payments Bank.
The order imposing the penalty was announced within hours before the board of parent firm One97 Communication approved discontinuation of several inter company agreements with Paytm Payments Bank.
The federal financial intelligence agency had issued a compliance Show Cause Notice to Paytm Bank for its violations of KYC rules of Payout services in respect of beneficiary accounts facilitating money laundering of illegal funds.
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“Scrutiny of voluminous records and submissions of Paytm Payments Bank established funds generated from illicit activities were laundered from accounts held in Paytm Bank,” confirmed a senior tax official.
In a media statement 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 Reserve Bank of India (RBI) had earlier barred Paytm Payment Bank from accepting new deposits from 29 February and later extended it to 15 March.
The Paytm lending service had reconstituted its board of directors, appointing ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal.“The company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing a new Chairman,” One97 Communications said in regulatory filing.
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