Paytm on Sunday issued a statement to clarify its position amidst speculations and reports regarding an investigation by the Enforcement Directorate (ED) for money laundering. It stated that there is no ongoing investigation by the ED into their operations or their founder & CEO for any anti-money laundering activities.
Both entities adhere to the highest ethical standards and categorically deny any involvement in money laundering activities. This was made following comments from Revenue Secretary Sanjay Malhotra about a potential probe if new allegations of fund siphoning emerged.
The firm acknowledged that while certain merchants on its platform have been subject to inquiries in the past, it has always fully cooperated with the authorities during such investigations. Paytm emphasized its commitment to operating with the highest ethical standards and denied any involvement in money laundering activities. The bank also stressed the importance of responsible journalism for the accurate dissemination of information.
“We would like to set the record straight and deny any involvement in anti-money laundering activities. We have and continue to abide by Indian laws and take regulatory orders with utmost seriousness,” the company said in a press note.
In response to the Reserve Bank of India’s (RBI) recent directive to halt accepting deposits or top-ups in customer accounts after February 29, Paytm pointed out that this action is part of ongoing supervisory engagement and compliance processes. The bank urged stakeholders to refer to the official RBI press release dated January 31, 2024, for accurate details rather than relying on unofficial sources.
Paytm remains transparent in its operations and continues to address any misinformation spread through various media channels, including social media, regarding the RBI’s actions, the company said in a statement.
Paytm said that it is exploring all possible options to ensure that the company’s stakeholders are protected from unwarranted and speculative stories.
This comes after Paytm Payments Bank has been directed to cease a majority of its operations by February 29, 2024. This directive encompasses the winding down of services such as customer deposits, credit products, and the widely used Paytm wallet. The RBI’s decision was based on concerns regarding persistent non-compliance and ongoing material supervisory issues within the bank, although specific details of these concerns were not disclosed.
The implications of this order are substantial for Paytm Payments Bank, which will no longer be able to collect deposits, engage in credit transactions, or recharge customer accounts, prepaid cards, wallets, FASTags, National Common Mobility Cards (NCMC), or any other type of customer account post the given deadline. In response to the RBI’s mandate, Paytm has communicated that while its UPI interface will continue to operate, it will require transitioning its UPI ID from the payments bank to another banking partner to maintain functionality.
Also Read: Thousands of accounts at Paytm Payments Bank set up improperly, used for money laundering: Report