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Paytm Payments Bank fined over Rs 5 crore for violations under money laundering act

The penalty order, dated February 15, coincided with the Reserve Bank of India's decision to grant an extension to the bank, allowing it until March 15 to wind up operations instead of the initially stipulated February 29.

Paytm Payments Bank hit with Rs 5.49 Cr penalty by Financial Intelligence Unit-India for money laundering AJR
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First Published Mar 1, 2024, 7:08 PM IST

The Financial Intelligence Unit-India has levied a penalty of Rs 5.49 crore on Paytm Payments Bank for breaching money laundering regulations, according to a statement issued by the finance ministry on March 1. The finance ministry revealed that the Financial Intelligence Unit initiated an inquiry into the payments bank following information from law enforcement agencies.

The investigation disclosed that certain entities within Paytm's business network were involved in illegal activities, including the organization and facilitation of online gambling. The statement noted that proceeds of crime from these illegal operations were funneled through bank accounts held by these entities at Paytm Payments Bank Ltd.

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After considering submissions from Paytm Payments Bank, the Director of FIU-IND, based on substantial evidence, found the charges against Paytm to be substantiated. The penalty order, dated February 15, coincided with the Reserve Bank of India's decision to grant an extension to the bank, allowing it until March 15 to wind up operations instead of the initially stipulated February 29.

The announcement of the penalty comes shortly after the board of Paytm's parent company approved the discontinuation of various inter-company agreements with Paytm Payments Bank. This move adds another layer of complexity to the challenges faced by the beleaguered payments bank.

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