NEW DELHI: In fresh trouble for Paytm, the Enforcement Directorate (ED) has initiated a preliminary inquiry against One97 Communications Ltd and its subsidiary Paytm Payments Bank.
The agency has sought information from the troubled fintech firm regarding ‘customers’ who may have been involved in dubious transactions.
Officials aware of the development said the Reserve Bank of India (RBI), which cracked down on the payment bank arm of Paytm over non-compliance last month, has asked the ED to check for suspected breaches at the fintech company.
One 97 Communications on Wednesday accepted that its subsidiaries and its associate, Paytm Payments Bank Limited have over time been receiving notices and requisition for information, documents and explanations from the authorities, including ED, with respect to the “customers that may have done business with the respective entities, and provided the required information, documents and explanations to the authorities”.
It added, “The company and its associate have continued to provide such information, documents and explanations to the Authorities as is being required by them.” The company also clarified that Paytm Payments Bank does not undertake outward foreign remittance.
The clarification by Paytm came amid reports that the ED was probing if Paytm and the payments bank were involved in foreign exchange violations. The fintech major had recently denied rumours that neither the company nor founder/CEO Vijay Shekhar Sharma was being probed by the agency.
“We have consistently assured that neither Paytm nor any of its associates are under investigation by any regulatory agency” the company had said recently.
) no review of the decision,” RBI Governor Shaktikanta Das had said.
In a big setback for SoftBank-backed Paytm, the RBI recently barred its payments bank from taking new or top-up deposits in customer accounts, prepaid instruments, wallets, etc. after February 29, 2024, owing to non-compliance. This, as per analysts, will result in a reduction in revenue and more losses for the already loss-making company. Not to forget customer exodus in large numbers.
The RBI has already ruled out any review of its action against the firm. “If you are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision,” RBI Governor Shaktikanta Das had said.