Foreign state actors stashed illicit funds in Paytm bank accounts: Financial Intelligence Unit

The Financial Intelligence Unit raps PPBL for failure to report suspicious transactions and reliance on third-party KYC; income from prohibited gambling, dating services routed through its accounts and remitted abroad

The matter first came to light over two years ago with the Cyber Crime Station of Hyderabad lodging First Information Reports (FIRs) under relevant sections of the Indian Penal Code and the Telangana State Gambling Act.

The FIRs flagged certain business entities and their network of businesses engaging in a number of illegal acts such as organising and assisting online gambling, routing the proceeds of such criminal activities through bank accounts they maintained with the payments bank.

The FIU, as per a summary of its March 1 order against PPBL, said the inception of its probe into the troubled payments bank stemmed from law enforcement agencies “identification” of this illegal activity. As part of the FIU’s mandate to ensure effective implementation of the Prevention of Money Laundering Act (PMLA), it regularly examines compliance levels of reporting entities like PPBL in the wake of any criminal conduct or fraud coming to light.

“In the course of such investigation, certain entities were found to have cheated lakhs of Indians through the offering of fraudulent services including prohibited gambling activities, dating services, and streaming. The proceeds of these fraudulent activities were subsequently remitted abroad,” the FIU noted.