CHENNAI: The Securities and Exchange board of India (SEBI ) has issued an administrative warning against Paytm for certain transactions with its banking unit in the fiscal year 2021-22, the fintech firm said in an exchange filing dated on July 15. Some transactions between Paytm and the now wound-down Paytm Payments Bank were conducted without approval from the company’s audit committee or its shareholders.
According to a report by The Economic Times two transactions with an unapproved amount of 3.24 billion rupees ($38.8 million) and 360 million rupees were the focus of the warning.
SEBI said the violations were viewed “very seriously” and directed Paytm to place the letter before its board for corrective measures and submit a report on action taken within 10 days thereafter. The regulatory body emphasised that there should be caution in the future and an improvement in compliance standards to prevent such instances from happening again. While stating that that failure to do so could lead to initiation of appropriate enforcement action in accordance with the law.
Paytm, in its response, said it believes it has consistently acted in compliance with regulation, and added that there is no impact on financials and operations of the company due to the warning.The company reiterated that it will provide a comprehensive response to SEBI’s concerns and maintain open communication with the regulatory body.
Earlier in the year India’s central bank ordered Paytm Payments Bank to stop accepting new deposits in its accounts or digital wallets, citing supervisory concerns and non-compliance with rules.