One97 Communications, the parent arm of payments solutions firm Paytm, on February 4 clarified that the company or its related entities are not facing any investigation from the Enforcement Directorate (ED).
The clarification came a day after reports said that the federal financial crime fighting agency could initiate an investigation against Paytm Payments Bank, the banking arm of Paytm, if charges related to money laundering are found.
The company "categorically denies any investigation by the Enforcement Directorate on OCL (One97 Communications Ltd), our associates and/or its Founder and CEO for anti-money laundering activities", the fintech major said in a regulatory filing.
A day earlier, news agency Reuters, which spoke to Revenue Secretary Sanjay Malhotra, reported that the ED may probe Paytm Payments Bank if if any fresh charges of fund siphoning are found.
"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,” Malhotra was quoted as saying.
Notably, the RBI on January 31 directed Paytm Payments Bank to stop accepting fresh deposits and making credit transactions from February 29 onwards. The lender would also be barred from accepting top-ups in any customer accounts, including prepaid instruments, wallets, FASTags, and NCMC cards, among others.
The RBI’s action against Paytm Payments Bank was taken following reports of non-compliance and supervisory concerns.
The central bank said a Comprehensive System Audit report and subsequent compliance validation report by the external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action.
Paytm, in its regulatory filing, dismissed media reports that have linked alleged money laundering to the RBI action. "The recent direction
from RBI is a part of the ongoing supervisory engagement and compliance process," it said.
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