Enforcement Directorate Finds No FEMA violation In Paytm Payments Bank Inquiry, Say Reports

The Enforcement Directorate has found no evidence of Foreign Exchange Management Act (FEMA) violations by Paytm Payments Bank Ltd (PPBL), as per reports. This comes amid media speculating about FEMA violations by the company in the past week.

However, the ED also found no involvement in FEMA as well as scheduled offences under the Prevention of Money Laundering Act (PMLA) thereby ruling out any money laundering investigation, as per The Hindu report.

This could provide reassurance to Paytm’s users, partners, stakeholders and reflects positively on the governance and risk management practices of the associate bank. Earlier, the company had informed in an exchange filing that One 97 Communications and its subsidiaries have over time been receiving notices and requisition for information, documents and explanations from the authorities, including ED. The company had also provided information, documents and explanations to the authorities as required. “We would also like to clarify that our associate Paytm Payments Bank Limited does not undertake Outward Foreign Remittance,” said Paytm in an exchange filing.

Additionally, a list of Frequently Asked Questions (FAQ) released by the Reserve Bank of India (RBI) on February 16, also bolstered confidence among investors and customers in the bank's stability and reliability. The FAQ confirmed that its widely-used Made in India QR code, Soundbox, and Card Machine, will remain operational without interruption even after March 15, 2024.

The company also announced transition of nodal account to Axis Bank by opening an Escrow Account to ensure uninterrupted merchant settlements.