Paytm Payments Bank to be probed for money laundering if new charges found
ED probe on Paytm: In response to potential new allegations of fund mismanagement, Revenue Secretary Sanjay Malhotra has announced that the Enforcement Directorate (ED) will launch an investigation into Paytm Payments Bank, as reported by Reuters.
Malhotra affirmed that any renewed charges of money laundering against Paytm, raised by the Reserve Bank of India (RBI), will be thoroughly examined in adherence to the law.
Recent reports from Bloomberg on Saturday suggest that the RBI is contemplating the revocation of Paytm Payments Bank Ltd.’s licence, possibly as soon as next month. Sources indicate the RBI’s prioritisation of safeguarding depositors’ interests and the potential for action after the February 29 deadline. By this date, Paytm Payments Bank is mandated to cease customers from replenishing their savings accounts or the widely-used digital payment wallet.
Regulatory scrutiny
Paytm, backed by SoftBank Group Corp, has been under sustained regulatory scrutiny, receiving multiple warnings over the past two years regarding questionable transactions between its popular payments app and its less-publicised banking arm.
In a startling move this week, the RBI unilaterally suspended a significant portion of the payments bank’s business, sending shockwaves through the finance and tech industries. However, if the RBI proceeds with the cancellation of its licence, it would be perceived as a more stringent regulatory response to address concerns surrounding the financial institution’s operations.
