Financial Intelligence Unit Imposes ₹5.49 Crore Fine on Paytm Payments Bank

The Financial Intelligence Unit-India (FIU-IND) has levied a penalty of ₹5.49 crore on Paytm Payments Bank Ltd for violations of the Prevention of Money Laundering Act. The penalties are attributed to the bank’s involvement in facilitating illegal activities, including online gambling, and mishandling of funds generated from such operations.

Investigation and Notice

• FIU-IND initiated a review of Paytm Payments Bank Ltd following specific information from law enforcement agencies regarding illegal activities.
• Compliance Show Cause Notice issued to the bank citing violations of various sections of PML rules.
• Violations include breaches of AML/CFT/KYC safeguards in payout services and beneficiary accounts.

RBI Directive and Allegations

• On January 31, RBI directed Paytm Payments Bank to halt acceptance of deposits and top-ups in customer accounts, wallets, FASTags, and other instruments by February 29 (later extended to March 15).
• Allegations include breaches of KYC norms and other regulatory standards.

Role of FIU-India

• FIU-India serves as the central national agency for processing, analyzing, and disseminating information on suspect financial transactions.
• It coordinates efforts of national and international intelligence, investigation, and enforcement agencies to combat money laundering and financing of terrorism.