India's FIU-IND Imposes Heavy Penalty on Paytm Payments Bank Ltd for Money Laundering Violations

Financial Intelligence Unit - India (FIU-IND) has penalized Paytm Payments Bank Ltd with a hefty sum of Rs 54,900,000 for alleged violations of anti-money laundering regulations as per the Prevention of Money Laundering Act (PMLA). The issuance of the penalty was a result of reported breaches by Paytm Payments Bank Ltd, and FIU-IND took action under the PMLA guidelines. A representative from Paytm Payments Bank informed IndiaToday.

in that the penalty is associated with issues in a business segment that was discontinued two years ago. The bank has since made improvements to its monitoring and reporting systems to ensure compliance with the regulations laid out by FIU. The bank was reportedly found to have violated rules set forth in the PMLA, along with related regulations and guidelines issued by the Director of FIU-IND.

The probe was initiated based on specific intelligence provided by law enforcement agencies regarding entities suspected of engaging in illicit activities, such as online gambling. It was alleged that profits from these activities, considered as proceeds of crime, were being channeled through accounts held with Paytm Payments Bank Ltd. Following a review of the evidence, FIU-IND issued a notice to the bank for contraventions of various sections of the PML Rules.

After considering submissions from Paytm Payments Bank Ltd, the Director of FIU-IND found the allegations to be valid. Consequently, a penalty of Rs 54,900,000 was levied on the bank in line with FIU-IND's authority under the PMLA. The penalty was imposed through an order dated February 15th, 2024, utilizing powers granted under Section 13 of the PMLA.