The Aryavarth Express
Agency(New Delhi): The Financial Intelligence Unit-India (FIU-IND), leveraging the authority vested in its Director under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002, has sanctioned a financial penalty amounting to Rs. 5,49,00,000 (five crore forty-nine lakh rupees) against Paytm Payments Bank Ltd. This action comes in light of the bank’s failure to fulfill its duties as per the PMLA in conjunction with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules) and other relevant directions and advisories from the Director FIU-IND.
The scrutiny process began when FIU-IND received detailed information from various law enforcement bodies concerning several organizations and their extensive networks involved in unlawful activities, notably the organization and facilitation of online betting platforms. The investigation revealed that the illicit funds generated from these activities, identified as proceeds of crime, were being funneled through accounts held at Paytm Payments Bank Ltd.
Subsequent to a detailed review of the bank’s records, FIU-IND dispatched a Show Cause Notice to Paytm Payments Bank, pointing out several infractions including breaches of Rules 7(3) and 2(1)(g), PML Rules; Rule 8(2) alongside Rule 3(1)(D) and Rule 2(1)(g); Rule 9(12), PML Rules; and Rule 9(14) regarding Anti-Money Laundering (AML) / Combating the Financing of Terrorism (CFT) / Know Your Customer (KYC) protocols related to Payout services and beneficiary accounts.
After evaluating the bank’s written and oral defenses, the Director of FIU-IND, armed with extensive documentary evidence, confirmed the allegations against Paytm. Consequently, on March 1st, 2024, leveraging the powers granted by Section 13, PMLA, the imposition of a Rs. 5,49,00,000 penalty was deemed justifiable.
This decision underscores the stringent regulatory landscape governing financial institutions in India, emphasizing the crucial importance of adherence to AML/CFT/KYC norms to prevent the misuse of the financial system for illegal activities.