Speaking on condition of anonymity, the sources stated that the Reserve Bank of India (RBI) is worried that some of the accounts may have been used for money laundering.
Latest Market Updates : According to three people with knowledge of the situation, India’s central bank discovered thousands of Paytm Payments Bank accounts that were opened without the required documentation. It has since forwarded this information to the nation’s financial crime fighting organization.
Speaking on condition of anonymity, the sources stated that the Reserve Bank of India (RBI) is worried that some of the accounts may have been used for money laundering.
They further stated that the RBI has notified the Prime Minister’s Office and the Ministry of Home Affairs of its findings in addition to the Enforcement Directorate.
A Paytm Payments Bank representative stated, “One 97 Communications Ltd. and Paytm Payments Bank have never been probed by the Enforcement Directorate,” referring to the bank’s parent business, the digital payments operator that is also known by the name Paytm.
“We respond to authorities on this matter as and when requested. Certain merchants who use our platforms have been the focus of investigations. We warn you against speculating and vehemently deny any charges of money laundering,” the statement continued.
Requests for comment made outside of regular business hours were not answered by the RBI, the Enforcement Directorate, the Finance Ministry, the Home Ministry, or the Prime Minister’s Office.
Paytm Payments Bank was given an order by the RBI on Wednesday to shut down the majority of its operations, including its well-known wallet, credit products, and deposits, by February 29.
Without providing further information, it claimed “persistent non-compliances and continued material supervisory concerns in the bank.”
Revenue Secretary Sanjay Malhotra told Reuters on Saturday that if any proof of illicit conduct is discovered, the Enforcement Directorate will look into Paytm Payments Bank.
In the two days that followed the RBI’s action against Paytm’s bank, the company’s stock fell 36%, wiping off $2 billion of its market worth.
During a conference call with analysts on Thursday, Paytm’s founder and rising star of the Indian startup scene, Vijay Shekhar Sharma, called the RBI’s action a “speed bump.” According to two of the individuals, the same identity evidence was used to link many Paytm Payments Bank accounts, and those accounts had transactions totaling millions of rupees.
One of them said that a “relatively” high number of inactive accounts had been discovered.
Disclaimer : The above article is meant for informational purposes only, and should not be considered as any investment advice.
Paytm is doing something wrong
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