Paytm Payments Bank Slapped with Rs 5.49 Cr Penalty by Financial Intelligence Unit of India for PMLA Violations

FIU-IND has imposed a penalty of Rs. 5,49,00,000 on Paytm Payments Bank Ltd for breaching obligations under the Prevention of Money Laundering Act (PMLA) and its associated rules

Penalty of 5.49 Cr imposed on Paytm Payments Bank: According to a press release of Ministry of Finance on 1 March 2024, the Financial Intelligence Unit-India (FIU-IND) has taken strict action against Paytm Payments Bank Ltd by imposing a penalty of Rs. 5.49 crore. This move comes in light of violations related to the Prevention of Money Laundering Act (PMLA), stemming from Paytm’s failure to meet its obligations under the PMLA and associated rules and guidelines.

Details of Violations:

FIU-IND initiated a thorough review of Paytm Payments Bank Ltd following specific information from law enforcement agencies. This information pointed towards certain entities engaging in illegal activities, such as organizing and facilitating online gambling, with the proceeds of these crimes being funnelled through bank accounts held in Paytm Payments Bank Ltd.

Upon scrutiny of the records, FIU-IND found Paytm Payments Bank Ltd in violation of several PMLA rules, including:

• Violations of Rules 7(3) and 2(1)(g) of the PML Rules.
• Breach of Rule 8(2) in conjunction with Rule 3(1)(D) and Rule 2(1)(g).
• Contravention of Rule 9(12) of the PML Rules.
• Infractions of Rule 9(14) concerning AML/CFT/KYC safeguards for Payout services and beneficiary accounts.

Penalty Imposed:

Following a thorough review of Paytm’s responses and the evidence at hand, the Director of FIU-IND found the charges against Paytm Payments Bank Ltd substantiated. Consequently, on March 1st, 2024, a penalty of Rs. 5.49 crore was imposed on the bank under Section 13 of the PMLA.

Conclusion:

This action by FIU-IND underscores the importance of financial institutions adhering to stringent anti-money laundering and counter-terrorist financing regulations. It serves as a reminder of the consequences for non-compliance with the PMLA and associated guidelines. Paytm Payments Bank Ltd is expected to take corrective measures to ensure full compliance with these regulations moving forward.

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To Download the Press Release of Finance Ministry CLICK HERE

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