Paytm Payments Bank Faces Allegations of Improperly Created Accounts, Possible Money Laundering
New Delhi: Paytm Payments Bank, a leading digital payments operator in India, is under scrutiny as the central bank has discovered hundreds of thousands of accounts created without proper identification. Concerns have been raised that some of these accounts may have been involved in money laundering activities. The Reserve Bank of India (RBI) has shared this information with the country’s financial crime-fighting agency, in addition to forwarding its findings to the Ministry of Home Affairs and the Prime Minister’s office.
The RBI’s move comes as it ordered Paytm Payments Bank to wind down most of its operations, including deposits, credit products, and its popular wallet, citing persistent non-compliance and significant supervisory concerns. The enforcement agency will initiate a probe into Paytm Payments Bank if any evidence of illegal activity is found.
Paytm Payments Bank, through its spokesperson, denied any involvement in money laundering and emphasized that neither the bank nor its parent company, One 97 Communications Ltd., have ever been investigated by the Enforcement Directorate. The spokesperson also stated that while some merchants using their platforms have been subject to investigations, the allegations of money laundering should be refuted and not speculated upon.
Following the RBI’s action, Paytm’s stock plummeted by 36%, resulting in a loss of $2 billion in market value. Nonetheless, Paytm’s founder Vijay Shekhar Sharma remains optimistic, referring to the RBI’s action as a mere “speed bump” during a conference call with analysts.
Sources familiar with the matter revealed that multiple accounts at Paytm Payments Bank were linked to the same identification proof, with transactions amounting to millions of rupees. Additionally, an unusually high number of dormant accounts were identified.
As the investigation unfolds, the RBI, Enforcement Directorate, Finance Ministry, Home Ministry, and the Prime Minister’s office have yet to respond to requests for comment outside of regular office hours.
Thousands of Paytm Payments Bank accounts have been reportedly created improperly, according to recent findings. This raises concerns about the security and integrity of the popular digital payment platform. The improper creation of these accounts could potentially lead to unauthorized access and misuse of personal information. Paytm, a leading player in the Indian digital payment market, needs to address these issues urgently to maintain customer trust and ensure the safety of their financial transactions.
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