The Enforcement Directorate has questioned senior executives of Paytm and received documents from them following the RBI’s recent move to ban Paytm Payments Bank Ltd from accepting deposits or recharges in customer accounts, official sources said on Thursday.
According to the sources, the central agency is conducting a preliminary examination of documents before deciding to initiate a formal probe into the alleged irregularities flagged by the RBI at the fintech company under the Foreign Exchange Management Act (FEMA).
Some documents were recently submitted by Paytm executives after which they were asked certain questions. More information is being sought, the sources said.
No irregularities have been detected so far and a case under FEMA will be registered only once an offense under the said law is found, she added.
An investigation under the Prevention of Money Laundering Act (PMLA) involving Paytm has been ongoing for some time, they said.
One97 Communications, which provides financial services under the Paytm brand, and its banking arm Paytm Payments Bank have received notices and requests for information regarding customers of the respective entities, an exchange filing by the company said on Wednesday.
Paytm said its partner Paytm Payments Bank Limited does not handle outward foreign remittances.
“One 97 Communications Limited (OCL), its subsidiaries and its partner, Paytm Payments Bank Limited, have over time received notices and requests for information, documents and explanations from the authorities, including the Enforcement Directorate (ED), with regarding the customers who may have transacted business with the respective entities and provided requisite information, documents and explanations to the authorities,” Paytm said in a filing with the regulator.
Paytm said the company and its employees have continued to provide information, documents and explanations to the authorities as required by them.
Earlier this month, the Enforcement Directorate and Financial Intelligence Unit asked the RBI to share its report on the recent action taken to ban Paytm Payments Bank Ltd from accepting deposits or top-ups in customer accounts, sources said.
The central bank on January 31 ordered it to stop accepting deposits or recharges into customer accounts, wallets, FASTags and other instruments after February 29.
The ED has been probing Paytm and other online payment wallets as part of its money laundering probe against Chinese-controlled mobile phone apps that allegedly launder money using merchant IDs created on these fintech platforms.
The Financial Intelligence Unit (FIU) has also sought the RBI’s report to analyze whether Paytm or PPBL followed the required procedures as a “reporting entity” under Section 13 of the PMLA.
Under this article of the Anti-Money Laundering Law, a financial institution, bank or intermediary must provide details to the FIU on keeping records of all transactions and documents proving the identity of its clients and beneficial owners, as well as account files and business correspondence relating to to its customers.
First print: February 15, 2024 | 11:19 am IST