According to Reuters, Paytm is being investigated by India’s Revenue Secretary over allegations of money laundering.
The Reserve Bank of India (RBI) ruled on Wednesday that One 97 Communications’ payments bank business, also known as Paytm, stop taking new deposits in its accounts or popular wallets beginning in March.
If new accusations of fund siphoning are discovered, the Enforcement Directorate (ED) will investigate Paytm Payments Bank, Revenue Secretary Sanjay Malhotra told Reuters.
According to Reuters, If there are any fresh charges of money laundering against Paytm by RBI, those will be investigated by the Directorate of Enforcement as per the law of the land,” Malhotra said in a statement.
Earlier on Saturday, Bloomberg reported that the Reserve Bank of India (RBI) is considering withdrawing Paytm Payments Bank Ltd.’s license as early as next month.
According to sources, the RBI wants to protect depositors first and may intervene after the February 29 deadline, when Paytm Payments Bank is needed to prevent clients from replenishing their savings accounts or the popular digital payment wallet.
The SoftBank Group Corp.-backed Paytm has been under scrutiny by the government for some time, with repeated warnings issued over the last two years concerning suspicious connections between its famous payments app and its lesser-known banking business.
The RBI shocked the finance and technology industries this week by immediately suspending much of the payments bank’s business, but a license cancellation would be viewed as a more serious measure.
Meanwhile, on Friday, Vijay Shekhar Sharma, founder and CEO of One97 Communications Ltd. (OCL), which owns the Paytm brand, stated that the company is committed to serving the nation in complete compliance.
According to Reuters, “Hey Paytmer, don’t worry! Your favorite app will run past February 29, no problem,” Sharma told us.
Paytm states that the RBI’s directive won’t affect your cash in savings, wallets, FASTags, or NCMC accounts. You can keep using your balance.
But, in a Thursday earnings chat, Paytm chiefs said they’re crafting a move plan for PPBL, wallet, and FASTag users to other banks.
PayTm Payments Bank is unique. It can take deposits, not loans. Paytm CEO Vijay Shekhar Sharma has 51% of the bank, and Paytm parent company One 97 Communications Ltd. has the rest.
