Mumbai: Paytm parent One97 Communication Ltd confirmed on Wednesday that it has received notices from the Enforcement Directorate (ED), seeking information about customers who have done business with its group companies.
Vijay Shekhar Sharma, owner of Paytm, informed the stock exchanges in a filing that the company has provided the necessary information and documents to the investigating agency.
“The company and its partner have continued to provide such information, documents and explanations to the authorities as they require. We would also like to clarify that our partner Paytm Payments Bank Ltd does not undertake foreign remittances,” the company said.
The explanation came a day later Mint reported that the ED has started an investigation 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 check,” said a person aware of the developments.
As of Wednesday, ED has yet to file an enforcement information report (ECIR), a formal record of a complaint filed by the agency.
A second person, also seeking anonymity, said regulators attached to the corporate affairs ministry are not yet involved in this case because it relates to an alleged breach of the money laundering law, not corporate law.
On 31 January, RBI imposed restrictions on Paytm Payments Bank, prohibiting credit transactions, additional deposits, or recharges in customer accounts, prepaid instruments, wallets, and FASTags after 29 February.
The central bank cited a comprehensive system audit report, and subsequent compliance validation reports by external auditors, which revealed alleged “ongoing non-compliance and continuing material control concerns at the bank, justifying further supervisory action”.
The restrictions on deposits for customer accounts do not apply, however, to interest payments, cash payments or refunds that can be credited at any time.
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 more than 30 million user accounts.
On 4 February, Paytm denied reports of any investigation by the ED against the company, its partners or founder and chief executive Sharma for alleged money laundering.
One 97 Communications, a minority shareholder in Paytm Payments Bank, announced on February 9 the establishment of a three-member group advisory panel headed by former chairman of Securities and Exchange Commission of India M. Damodaran and consisting of MM Chitale, former chairman 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, 22:07 IST