FIU-IND imposes penalty of Rs. 5,49,00,000 on Paytm Payments Bank for violations of its obligations under PMLA

The Financial Intelligence Unit-India (FIU-IND), in furtherance of the powers conferred upon the Director FIU-IND under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002, has imposed a monetary penalty of Rs. 5,49,00,000 (rupees five crore forty nine lakh) on Paytm Payments Bank Ltd 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-IND.

FIU-IND launched an investigation into Paytm Payments Bank Ltd after receiving specific information from law enforcement agencies about a few companies and their network of enterprises involved in a variety of illicit conduct, including organizing and assisting online gambling. Furthermore, the money earned by these illicit operations, known as proceeds of crime, was trafficked and channelled through bank accounts held by these organizations with Paytm Payments Bank Ltd.

In light of the foregoing and a review of the documents on file, FIU-IND issued a compliance Show Cause Notice to the bank for violations of (i) Rules 7(3) and 2(1)(g), PML Rules; (ii) Rule 8(2) read with Rule 3(1)(D) and Rule 2(1)(g); (iii) Rule 9(12), PML Rules; and (iv) Rule 9(14) in terms of AML / CFT / KYC safeguards in respect of Payout services and AML / CFT / KYC in respect of beneficiary accounts.

After reviewing the written and oral objections of Paytm Payments Bank Ltd, the Director, FIU-IND, based on the extensive evidence on file, determined that the accusations against Paytm were justified.

Consequently, vide order dated March 1st, 2024 in the exercise of his powers under Section 13, PMLA, it was found to be appropriate to impose a penalty of Rs. 5,49,00,000.