Mumbai: Paytm parent, One97 Communication Ltd, confirmed on Wednesday that it has received notices from the Enforcement Directorate (ED), requesting information on customers who have conducted business with its group companies.
Vijay Shekhar Sharma, owner of Paytm, informed the stock exchanges in a filing that the company has furnished the necessary information and documents to the investigating agency.
“The company and its associate have continued to provide such information, documents and explanations to the authorities as is being required by them. We would also like to clarify that our associate Paytm Payments Bank Ltd does not undertake outward foreign remittance,” said the company.
The clarification came a day after Mint reported that the ED has initiated a probe into suspected breaches at Paytm Payments Bank following a referral from the Reserve Bank of India (RBI).
The Enforcement Directorate is currently verifying the information it has received from RBI. “The next step will depend on the outcome of this verification,” said a person aware of the developments.
As of Wednesday, ED is yet to file an enforcement case information report (ECIR), a formal entry of a complaint lodged by the agency.
A second person, also seeking anonymity, said regulators attached with the ministry of corporate affairs are not yet involved in this case as it pertains to alleged breach of the money laundering law, and not company law.
On 31 January, RBI had imposed restrictions on Paytm Payments Bank, prohibiting credit transactions, further deposits, or top-ups in customer accounts, prepaid instruments, wallets, and FASTags after 29 February.
The central bank had cited a comprehensive system audit report, and subsequent compliance validation reports by external auditors, which revealed alleged “persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action”.
The restrictions on deposits for customer accounts do not, however, apply to interest payments, cashbacks or refunds, which may be credited anytime.
RBI has already ruled out a review of its decision in the case of Paytm Payments Bank, which has more than 300 million wallet users and over 30 million user accounts.
On 4 February, Paytm had denied reports of any investigation by the ED against the company, its associates or founder and chief executive Sharma for alleged money laundering.
One 97 Communications, a minority shareholder in Paytm Payments Bank, had on 9 February announced the setting up a three-member group advisory panel led by former Securities and Exchange Board of India chairman M. Damodaran and comprising M.M. Chitale, former president of the Institute of Chartered Accountants of India and R. Ramachandran, former chairman and managing director of Andhra Bank, to look into the alleged regulatory breach.
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Published: 14 Feb 2024, 10:07 PM IST