ED files case against Paytm under FEMA charges

ED tightens grip: The Enforcement Directorate is looking into information related to foreign transactions of embattled fintech Paytm’s banking arm, as per reports.

Republic TV sources also confirmed the update.

The development comes after the Reserve Bank of India earlier this month barred Paytm Payments Bank from engaging in accepting deposits for customer accounts, prepaid instruments, FASTags, wallets, and more after the February 29, 2024 deadline.

The crime agency has registered a forex violations case against One97 Communications, which operates under the Paytm name for a probe. Additionally, the ED and Financial Intelligence Unit (FIU) have sought an RBI report on the same, according to two sources cited by Reuters.

Paytm has denied any wrongdoing over the forex violation allegations over exchanges. 

In February, ED had initiated a probe into Paytm over suspicions of violating foreign exchange rules. 

Paytm and the Enforcement Directorate have not yet responded to the Reuters report, or issued a statement on the matter.

The government source based in New Delhi said, "This is a preliminary examination." 

ED sought more details from the RBI after its ordered to Paytm Payments Bank on the back of persistent and serious supervisory concerns.

The ED has not filed an enforcement case information report in this regard. As of now, only ED and the RBI are examining the issue. 

Since January 31, the value of Paytm's stock has plummeted by over 45 per cent, with an estimated loss of $2.6 billion in shareholders' wealth. As of February 14, shares have been marked under the Additional Surveillance Measure (ASM) on the Bombay Stock Exchange. ASM is a regulatory mechanism implemented by stock exchanges to closely monitor and regulate trading activities of certain securities. 

(With Reuters Inputs)