In what comes as another setback for the beleaguered Paytm Payments Bank, the Financial Intelligence Unit-India (FIU-IND) imposed a fine of Rs 5.49 crore on the bank for violating anti-money laundering rules.
The fine was imposed “with reference to the violations of its obligations under the PMLA read with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules) issued thereunder and applicable guidelines and advisories issued by the Director FIU-IN,” the finance ministry said in a statement.
The action was initiated by FIU-IND following specific information from law enforcement that a few entities and their network of businesses associated with Paytm Bank are engaged in illegal acts, including organising and facilitating online gambling. The proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank, the ministry said.
FIU-IND issued a compliance show cause notice to the bank for its violations of (i) Rules 7(3) and 2(1)(g), PML Rules; (ii) violation of Rule 8(2) read with Rule 3(1)(D) and Rule 2(1)(g); (iii) violation of Rule 9(12), PML Rules; and (iv) violation of Rule 9(14) in terms of AML / CFT / KYC safeguards in respect of Payout services; and AML / CFT / KYC in respect of beneficiary accounts, the ministry stated.
After considering the written and oral submissions of the bank FIU-IND found that the charges against Paytm were valid.
Reacting to the development, a Paytm Bank spokesperson said the penalty pertains to issues within a business segment that was discontinued two years ago. “Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit,” the spokesperson said.
