Paytm Payments Bank: Improperly Set Up Accounts Allegedly Used for Money Laundering

RBI Expresses Concerns Over Potential Money Laundering Through Improperly Set Up Paytm Payments Bank Accounts.

India’s central bank, the Reserve Bank of India (RBI), has identified hundreds of thousands of accounts at Paytm Payments Bank that were created without proper identification. The RBI has shared this information with the country’s financial crime fighting agency.

The Reserve Bank of India (RBI) has expressed concern that some of the accounts identified at Paytm Payments Bank, created without proper identification, may have been utilized for money laundering. The sources providing this information chose to remain anonymous.

In addition to notifying the Enforcement Directorate, the Reserve Bank of India (RBI) has shared its findings with the Ministry of Home Affairs and the Prime Minister’s Office, according to anonymous sources.

A spokesperson for Paytm Payments Bank clarified that neither One 97 Communications Ltd. nor Paytm Payments Bank has ever been investigated by the Enforcement Directorate.

spokesperson for Paytm Payments Bank denied any investigation by the Enforcement Directorate, acknowledging only merchant-related inquiries and refuting money laundering allegations, urging against speculation.

Requests for comments from the RBI, Enforcement Directorate, Finance Ministry, Home Ministry, and Prime Minister’s Office went unanswered outside normal office hours.

On Wednesday, the RBI directed Paytm Payments Bank to cease most of its operations, including deposits, credit products, and its wallet service by Feb. 29. The decision was based on ‘persistent non-compliances and continued material supervisory concerns in the bank,’ as stated by the RBI without providing specific details.

Enforcement Directorate to Investigate Paytm Payments Bank if Illegal Activity Detected, says Revenue Secretary. Paytm’s stock plummeted 36% in two days post RBI’s regulatory action, resulting in a $2 billion market value loss. Paytm’s founder Vijay Shekhar Sharma downplayed the RBI’s move, calling it a ‘speed bump’ during a conference call with analysts on Thursday.

Multiple accounts at Paytm Payments Bank were discovered to be linked to the same identification proof, with transactions running into millions of rupees, according to sources. Additionally, an ‘unusually’ high number of dormant accounts were identified, raising concerns.

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