New Delhi: The Financial Intelligence Unit-India (FIU-IND) has imposed a monetary penalty of Rs. 5,49,00,000 on Paytm Payments Bank Ltd for violations of its obligations under the Prevention of Money Laundering Act (PMLA), 2002. The penalty was imposed by the Director FIU-IND under Section 13(2)(d) of the PMLA.
The enforcement action comes following a review initiated by FIU-IND based on specific information received from law enforcement agencies. The investigation focused on entities and their network of businesses engaged in illegal activities, including organizing and facilitating online gambling. The proceeds of these illegal operations were found to be routed through bank accounts maintained by these entities with Paytm Payments Bank Ltd.
After scrutinizing the documents on record, FIU-IND issued a compliance Show Cause Notice to Paytm Payments Bank Ltd for various violations, including those of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules), and applicable guidelines and advisories issued by the Director FIU-IND.
The violations included breaches of Rules 7(3) and 2(1)(g), PML Rules; violation of Rule 8(2) read with Rule 3(1)(D) and Rule 2(1)(g); violation of Rule 9(12), PML Rules; and violation of Rule 9(14) concerning Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Know Your Customer (KYC) safeguards related to payout services and beneficiary accounts.
Following written and oral submissions by Paytm Payments Bank Ltd, the Director, FIU-IND, found the charges substantiated based on the available material. In an order dated March 1st, 2024, the Director exercised his powers under Section 13 of the PMLA and imposed a penalty of Rs. 5,49,00,000 on Paytm Payments Bank Ltd.