After over four years of investigation, the FIU confirmed that the charges against the Paytm lender under the PMLA were substantiated.
Paytm Payments Bank received a fine of ₹5.49 crore for money laundering due to its failure to establish an internal mechanism to identify and report suspicious transactions, as required by the anti-money laundering law, according to the Financial Intelligence Unit (FIU).
As per a report from PTI, the FIU confirmed that the allegations against the Paytm lender under the Prevention of Money Laundering Act (PMLA) were proven after over four years of investigation, leading to a showcase notice being issued on February 14, 2022. The fine was levied on the Paytm entity following the resignation of its chairperson Vijay Shekhar Sharma from the position.
A spokesperson from Paytm Payments Bank mentioned that the FIU penalty is related to problems in a business segment that was shut down two years ago.”Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU),” a spokesperson stated.
Incorrectly stating that Paytm Payments Bank’s issues started on January 31 when the RBI prohibited it from accepting new deposits is misleading. According to the FIU order, actions against this entity started in 2020 based on information from law enforcement agencies regarding illicit activities carried out by several businesses linked to a foreign state syndicate. This led to FIRs being filed by the cyber crimes unit of the Hyderabad Police under different sections of the IPC and the Telangana State Gambling Act.
According to police reports, specific individuals and their group of companies were involved in various illegal activities, including facilitating online gambling. The funds generated from these unlawful activities were funnelled through bank accounts held by the same individuals with Paytm Payments Bank, as reported by PTI.
As per the FIU, reports from the public indicated that certain organisations were involved in deceiving a large number of Indians by offering illegal services like gambling, dating, and streaming services.
The order stated “The proceeds of these fraudulent activities were subsequently remitted abroad and several of the involved entities made use of payment intermediaries to implement their fraudulent designs within the country,”
Paytm Payments Bank was charged by the Financial Intelligence Unit for not having an internal mechanism to detect and report suspicious transactions as required by the PMLA and PML Rules, specifically related to its payout service and accounts of certain entities.
The lender is facing charges from the FIU for not conducting continuous due diligence on its payout service and accounts of entities involved in the same service.
The FIU has accused it of failing to meet the requirements regarding reliance on third-party KYC, by depending on a non-compliant or unregulated entity, which violates section 12 of the PMLA concerning record-keeping by reporting entities.
Source : Hindustan Times
Leave a Reply