Paytm Payments Bank hit with Rs 5.49 crore penalty for money laundering

Financial Intelligence Unit – India (FIU-IND) has hit Paytm Payments Bank Ltd with a hefty penalty of Rs 5,49,00,000 for alleged violations of anti-money laundering rules under the Prevention of Money Laundering Act (PMLA).

The move comes as FIU-IND, acting under the PMLA, took note of alleged breaches by Paytm Payments Bank Ltd. The bank was accused of violating rules outlined in the PMLA and its associated regulations, as well as guidelines issued by the Director FIU-IND.

The investigation was prompted by specific information provided by law enforcement agencies regarding certain entities believed to be involved in illicit activities, including online gambling.

It was alleged that the profits from these activities, considered proceeds of crime, were being funnelled through accounts held with Paytm Payments Bank Ltd.

After carefully examining the available documents, FIU IND issued a notice to Paytm Payments Bank Ltd for breaching several sections of the PML Rules, including Rules 7(3) and 2(1)(g), Rule 8(2) in conjunction with Rule 3(1)(D) and Rule 2(1)(g), Rule 9(12), and Rule 9(14), concerning AML/CFT/KYC protocols for payout services and beneficiary accounts.

After considering both written and oral arguments from Paytm Payments Bank Ltd, the Director FIU-IND decided that the allegations were substantiated. Consequently, a penalty of Rs 5,49,00,000 was imposed on the bank, in line with the powers vested in FIU-IND by the PMLA.

The imposition of a penalty of Rs 5,49,00,000 was deemed appropriate through an order dated February 15th, 2024, exercising powers under Section 13 of the PMLA.