Paytm dismisses reports of money laundering and FEMA violation probes as 'misleading and malicious'

Paytm FEMA violation: Fintech major Paytm has rejected reports suggesting investigations by the Enforcement Directorate (ED) into alleged money laundering and FEMA (Foreign Exchange Management Act) violations involving the firm and its founder, Vijay Shekhar Sharma. The company termed the reports "misleading, baseless, and malicious" and clarified that no such probe has been initiated against either One97 Communications or Vijay Shekhar Sharma.

This denial comes amid the Reserve Bank of India's (RBI) crackdown, as it issued a deadline to Paytm Payments Bank to halt all transactions after February 29. Paytm emphasised that neither the parent brand nor its CEO is the subject of any investigation by the financial crime-fighting agency.

"We would like to reiterate that the company and its associate Paytm Payments Bank Limited are not the subject matter of any such investigation. Such media reports are entirely misleading, baseless, and malicious, which harm the interests of all our stakeholders," Paytm said in a statement.

The company further clarified that the ED has not initiated any investigations into One97 Communications, its associates, or top management. It refuted claims of any FEMA violations and pledged to continue providing clarifications as needed.

Addressing recent misinformation and speculation, Paytm stated, "This filing is done in the interest of transparency and protecting our reputation, customers, shareholders, and stakeholders from being influenced by unwarranted and speculative stories."

The Reserve Bank of India's recent directive to Paytm Payments Bank raised concerns about alleged violations of KYC (Know Your Customer) regulations, prompting the banking regulatory body to consider revoking the operating permit of the bank as early as March 2024. The RBI accused Paytm Payments Bank of failing to comply with minimum KYC rules for account holders and conducting multiple transactions beyond regulatory limits, raising money-laundering concerns.

Despite these allegations, Paytm reiterated its adherence to all RBI rules and parameters set by the Government of India.

(With ANI inputs.)