Revenue Secretary Warns of Possible ED Investigation into Paytm Payments Bank

5 Feb 2024 , 10:32 AM

According to Revenue Secretary Sanjay Malhotra, if any new allegations of fund siphoning are discovered, the Enforcement Directorate (ED) would investigate Paytm Payments Bank, as reported by the Reuters news agency.

‘If there are any fresh charges of money laundering against Paytm by RBI, those will be investigated by Directorate of Enforcement as per the law of the land,’ stated Malhotra.

The Reserve Bank of India (RBI) is thinking about revoking Paytm Payments Bank Ltd.’s license as early as next month, according to a report published by the news agency Bloomberg earlier on Saturday.

Paytm was funded by SoftBank Group Corp. The regulator has been keeping an eye on Paytm for a while now after issuing several warnings over the previous two years for dubious activities involving the company’s well-known payments app and its less well-known banking division.

A license cancellation would be viewed as a more serious measure than the RBI’s sudden suspension of much of the payments bank’s business, which shocked the internet and finance industries this week.

The founder and CEO of One97 Communications Ltd (OCL), which is the owner of the Paytm brand, Vijay Shekhar Sharma, stated on Friday that his business is dedicated to providing full compliance services to the country.

‘To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual,’ Sharma stated.

According to Paytm, users can keep using their current amounts in their savings accounts, wallets, FASTags, and NCMC (National Common Mobility Card) accounts, and the RBI decision has no effect on their deposits.

On Thursday’s earnings call, Paytm’s top management did, however, state that they are developing a plan to migrate PPBL, wallet, FASTag, and other users to other banks.

As a restricted bank, Paytm Payments Bank is able to accept deposits but not extend credit. The bank is owned 51% by Paytm CEO Vijay Shekhar Sharma and the remaining 49% by Paytm parent company One 97 Communications Ltd.

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