The Financial Intelligence Unit-India has imposed a penalty of Rs 5.49 crore on Paytm Payments Bank for violating money laundering norms.
In a statement issued on March 1, the finance ministry said that its Financial Intelligence Unit began looking into the beleaguered payments bank after receiving information from law enforcement agencies that a few entities and their business network were engaged in illegal activities, including organising and facilitating online gambling.
"Further, the money generated from these illegal operations, i.e. proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank Ltd," the statement said.
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"After considering the written and oral submissions of the Paytm Payments Bank Ltd, Director, FIU-IND, based on the voluminous material available on record, found that the charges against Paytm were substantiated," the statement added.
As per a spokesperson for Paytm Payments Bank, the aforementioned penalty pertains to issues within a business segment that was discontinued two years ago.
"Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit," the spokesperson added.
The announcement of the penalty comes hours after the board of parent firm Paytm approved the discontinuation of several inter-company agreements with Paytm Payments Bank.
Paytm's stock has been in free-fall ever since the RBI, on January 31, ordered Paytm Payments Bank to wind down its operations due to "persistent non-compliances and continued material supervisory concerns". Since then, Paytm founder Vijay Shekhar Sharma has resigned from the board of the payments bank.
Also Read: The Paytm Payments Banks crisis timeline – how the events unfolded
"We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us would have to take action?" Governor Shaktikanta Das had said on February 8.
The RBI did not immediately respond to a query asking for a comment on the penalty imposed on Paytm Payments Bank.
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