Paytm Payments Bank slapped with Rs 5.49 crore penalty for money laundering, says Finance Ministry

In a major setback for Paytm Payments Bank, the Financial Intelligence Unit (FIU) has imposed a hefty ₹5.49 crore penalty, citing violations of the Prevention of Money Laundering Act (PMLA), as reported by PTI. This move comes on the heels of the Reserve Bank of India’s previous decision on January 31, barring the bank from accepting new deposits initially until February 29, which was later extended to March 15.

Just hours before this announcement, One97 Communications revealed that the board has terminated inter-company agreements with the lending service to reduce dependencies, marking a strategic shift.

The Ministry of Finance alleges that Paytm Payments Bank was used to route proceeds of crime through bank accounts linked to entities engaged in various illegal activities. These illicit practices, according to the ministry, came to light through a review initiated by the FIU, triggered by information from law enforcement agencies. The entities involved were reportedly engaged in activities such as organizing and facilitating online gambling.

In a statement, the ministry said, “The Financial Intelligence Unit-India (FIU-IND) has imposed a monetary penalty of ₹5.49 crore on Paytm Payments Bank Ltd about the violations of its obligations under the PMLA.” The penalty was officially ordered by the FIU on February 15, dealing a fresh blow to the beleaguered bank.