ED not discovered forex breaches at Paytm unit yet, states sources

20 Feb 2024 , 11:12 AM

The Enforcement Directorate’s inquiry into alleged foreign currency crimes at Patym Payments bank has not yet yielded any results, a government source directly involved in the subject stated on February 19.

Last Monday, the Enforcement Directorate initiated an inquiry into international transactions by Paytm Payments Bank, a subsidiary of One 97 Communications, also known as Paytm.

Paytm shares have fallen by more than 50% after the Reserve Bank of India stated on January 31 that Paytm Payments Bank will no longer accept fresh cash into its accounts or wallets. The rout has cost stockholders around $3.1 billion.

According to the source, the inquiry discovered several weaknesses in the know-your-customer regulations that check user accounts.

However, the ‘Enforcement Directorate has not yet detected any foreign exchange management act violations by Paytm Payments Bank,’ according to a source.

According to the source, there were also some concerns with the bank failing to generate a suspicious transaction report, and the Enforcement Directorate is currently deciding whether to punish anyone for any possible crimes.

On Monday, Paytm reiterated a statement from the previous week, indicating that the company had been providing information to the Enforcement Directorate and other relevant authorities.

On Friday, the Reserve Bank of India granted Paytm Payments Bank a 15-day extension of its wind-down period till March 15. Paytm also said on Friday that it had hired a new banking partner, Axis Bank, to help keep some of its popular products functioning and withstand the present crisis.

At around 10.11 AM, Paytm was trading 5% higher at ₹376.25, against the previous close of ₹358.35 on NSE.

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