
Paytm Payments Bank Ltd (PPBL) has been hit with a penalty of Rs 5.49 crore by the Financial Intelligence Unit-India (FIU-IND) for violating its obligations under the Prevention of Money Laundering Act (PMLA), according to the Finance Ministry. This penalty comes as PPBL is already under scrutiny from the Reserve Bank of India (RBI) for persistent non-compliance and ongoing supervisory concerns.
In response to the RBI’s actions against its associate firm, One 97 Communications (the parent company of Paytm), the board of directors has approved the discontinuation of inter-company agreements with Paytm Payments Bank. This decision aims to reduce dependencies and address the regulatory issues faced by the company.
Furthermore, the RBI has directed Paytm Payments Bank to halt deposits, credit transactions, and top-ups in customer accounts, prepaid instruments, and wallets by March 15. This move is part of the regulatory measures taken to ensure compliance and address the concerns regarding the bank’s operations.
In light of these developments, One97 Communications has requested the National Payment Council of India (NPCI) to review its application to become a Third-Party Application Provider (TPAP) for the continued operation of the Paytm application using the Unified Payments Interface (UPI). Approval as a TPAP is necessary to enable UPI-based payment transactions for Paytm customers. Currently, all UPI transactions on the Paytm app are processed through Paytm Payments Bank, which is registered as a TPAP under its associate company, OCL.
These recent actions and regulatory interventions reflect the authorities’ focus on ensuring compliance and addressing concerns related to money laundering and regulatory compliance in the banking sector. It remains to be seen how Paytm Payments Bank will address these issues and work towards resolving the regulatory challenges it faces.