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Business News/ Companies / News/  ED to probe Paytm Payments Bank for fund siphoning if new charges found, says Revenue Secy. No action taken yet
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ED to probe Paytm Payments Bank for fund siphoning if new charges found, says Revenue Secy. No action taken yet

Paytm could face investigation for money laundering, as per a Reuters report, if new charges are found. Meanwhile, Revenue Secretary clarified that no law enforcement agencies have taken action against Paytm's as of now.

RBI is considering scrapping the license of Paytm Payments Bank Ltd (REUTERS)Premium
RBI is considering scrapping the license of Paytm Payments Bank Ltd (REUTERS)

The Enforcement Directorate (ED) will probe Paytm Payments Bank if any fresh charges of fund siphoning are found, Revenue Secretary Sanjay Malhotra said, according to the Reuters news agency.

"If there are any fresh charges of money laundering against Paytm by RBI, those will be investigated by Directorate of Enforcement as per the law of the land," said Malhotra.

Meanwhile, Revenue Secretary Sanjay Malhotra later clarified that no law enforcement agencies have taken any action against Paytm yet, the company told Mint.

How RBI’s Restrictions On Paytm Payments Bank Impact You | All You Need To Know | Watch

Earlier on Saturday, Bloomberg news agency reported that the Reserve Bank of India (RBI) is considering scrapping the license of Paytm Payments Bank Ltd. as early as next month.

Citing sources, the news agency said that the RBI wants to safeguard depositors first and could act after 29 February deadline when Paytm Payments Bank is required to stop customers from replenishing their savings accounts or the popular digital payment wallet.

Morgan Stanley buys Paytm shares worth 244 crore

SoftBank Group Corp.-backed Paytm has been in the cross-hairs of the regulator for some time, with multiple warnings over the past two years about questionable dealings between its popular payments app and its lesser-known banking arm.

This week, the RBI stunned the finance and tech industries by abruptly suspending much of the payments bank’s business, but a license cancellation would be seen as a more severe move.

What triggered the shock move against Paytm bank?

Meanwhile, on Friday, Vijay Shekhar Sharma, founder and CEO of One97 Communications Ltd (OCL), which owns Paytm brand said the company is committed to serving the nation in full compliance.

"To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual," Sharma said.

‘Salute you for your support’: Paytm's Vijay Shekhar Sharma tells customers

Paytm said that the RBI order also does not impact user deposits in their savings accounts, wallets, FASTags and NCMC (National Common Mobility Card) accounts, and they can continue to use the existing balances.

However, Paytm top management during an earning call on Thursday said they are working on a migration plan for PPBL, wallet, FASTag etc users with other banks.

After a bloody nose, Paytm puts up a brave face

Paytm Payments Bank operates as a restricted bank that can take deposits but cannot lend. Paytm CEO Vijay Shekhar Sharma owns 51% stake of the bank and Paytm parent One 97 Communications Ltd. holds the rest.

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Published: 03 Feb 2024, 01:29 PM IST
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