FIU imposed fine of crores on Paytm

New Delhi. FIU-Financial Intelligence Unit-India has imposed a fine of Rs 5.49 crore on Paytm Bank. This action has been taken under the Money Laundering Act. The problems of Paytm Payments Bank are not decreasing. After strict action by the Reserve Bank of India (RBI) due to non-compliance of banking rules, now the Financial Intelligence Unit-India (FIU-India) has taken action. FIU-India has imposed a fine of Rs 5.49 crore on Paytm Payments Bank.

Paytm Payments Bank, owned by One97 Communications, has been targeted by the Financial Intelligence Unit of the Finance Ministry. FIU has imposed a fine of Rs 5.49 crore on Paytm Payments Bank, accusing it of money laundering. The FIU found that several entities used Paytm Payments Bank accounts to carry out criminal activities.
The Financial Intelligence Unit (FIU-IND) of the Finance Ministry has imposed a penalty of Rs 5.49 crore on One97 Communications Services-owned Paytm Payments Bank for violating its obligations under the Prevention of Money Laundering Act. In a statement, the Finance Ministry said the FIU-IND initiated the review of Paytm Payments Bank upon receiving specific information from law enforcement agencies about certain entities and their network of businesses. It said that the funds generated from these illegal operations, i.e. the proceeds of crime, were routed through bank accounts maintained by these entities with Paytm Payments Bank.

The Financial Intelligence Unit-India (FIU-IND) has imposed a monetary sanction in furtherance of the powers conferred on the Director, FIU-IND, under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002. A fine of Rs. 5,49,00,000 (Five Crore Thirty Nine Lakh) has been imposed on Paytm Payments Bank Limited in respect of breach of its obligations under PMLA read with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules) issued thereunder. A fine of Rs.) has been imposed. and applicable guidelines and advisories issued by Director FIU-IND.

FIU-IND initiated review of Paytm Payments Bank Limited upon receiving specific information from law enforcement agencies regarding certain entities and their network of businesses engaged in various illegal activities including organizing and facilitating online gambling. Further, the funds generated from these illegal operations, i.e. the proceeds of crime, were routed and remitted through bank accounts maintained by these entities with Paytm Payments Bank Limited.

Pursuant to the above and examining the documents on record, FIU IND issued a compliance show cause notice to the bank for (i) violation of Rule 7(3) and 2(1)(g), PML Rules; (ii) contravention of Rule 8(2) read with Rule 3(1)(d) and Rule 2(1)(g); (iii) Breach of Rule 9(12), PML Rules; and (iv) breach of Rule 9(14) in respect of AML/CFT/KYC safeguards in relation to Payout Services; and AML/CFT/KYC in respect of beneficiary accounts. After considering the written and oral submissions of Paytm Payments Bank Limited, based on voluminous material available on record, the Director, FIU-IND, found that the allegations against Paytm were warranted. Consequently, in exercise of its powers under Section 13, PMLA, vide order dated February 15, 2024, it was found appropriate to impose a fine of Rs.