ED initiates FEMA probe against Paytm Payments Bank amid RBI curbs
The Enforcement Directorate on Wednesday initiated a probe into charges against Paytm Payments Bank, according to a NDTV report quoting sources.
FollowA case under the Foreign Exchange Management Act (FEMA) has been initiated against Paytm concerning Paytm Payments Bank Ltd, adding to the ongoing challenges faced by the company. Earlier reports indicated that the Enforcement Directorate was probing potential violations of foreign exchange rules by platforms operated by One 97 Communications.
According to government sources as quoted by Reuters, the fintech company is under investigation under specific provisions of the Foreign Exchange Management Act (FEMA), which pertain to individual and corporate transfers overseas.
Initially, Paytm had refuted allegations that the ED was investigating the firm and its subsidiary, Paytm Payments Bank Ltd (PBBL), for potential violations of foreign exchange laws.
In a filing with the stock exchange, One97 Communications Ltd (OCL), the parent company of Paytm, refuted reports of any investigation or violation of Foreign Exchange rules by the company or its affiliate PBBL.
"To address recent misinformation, factual inaccuracies, and speculation, One 97 Communications Limited would like to set out the Company’s position and directly address rumors in the recent misleading media reports about the Company. This filing is done in the interest of transparency, and protecting our reputation, customers, shareholders, and stakeholders from being influenced by unwarranted and speculative stories. We will continue to post such clarifications, as required," said OCL.
This investigation compounds the challenges for Paytm CEO Vijay Shekhar Sharma, following restrictions imposed by the Reserve Bank of India (RBI) on PPBL, which houses wallet and UPI services that are provided through the Paytm app. This move effectively halted most of its operations, including its widely-used digital wallet, due to "persistent non-compliance".
The central bank, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags and other instruments after February 29.
Despite the ongoing crisis, Paytm continues to hire for various positions across product and business divisions, according to a blog. According to a blog posted on Paytm's website, recruitment partners are observing sustained high interest from top talents across the country to join the company.
Page Group, a recruitment partner affiliated with Paytm, has stated that the company is actively seeking candidates for product and business roles.
"We have been recruiting high calibre and premium talent for the Paytm business for a while now, and expect the trend to continue. We are actively seeking individuals for product and business positions at Paytm, and there continues to be strong interest from quality candidates for these roles," Page Group MD Ankit Agarwala said in the blog.
"Paytmers have come together and stand united. In fact, our recruitment partners continue to see high interest from top talent in the country, who want to join team Paytm and play an important role in redefining India’s digital landscape," Paytm said in the blog.
Paytm is estimated to have around 30,000 employees.
"At Paytm, our commitment to innovation, excellence, and our team remains unshaken. The trust and enthusiasm of our colleagues, combined with the recognition from the recruitment and tech communities, reinforce our belief in the bright future that lies ahead," the blog added.
