2024-02-03 16:24:53
India’s central bank has discovered hundreds of thousands of accounts at payments bank Paytm created without proper identification and passed the information to the country’s financial crime agency, three sources familiar with the matter said. .
The Reserve Bank of India (RBI) is concerned that some of these accounts could have been used for money laundering, the sources said on condition of anonymity.
Besides informing the Enforcement Directorate, the RBI has conveyed its findings to the Home Ministry and the Prime Minister’s Office, they added.
“One 97 Communications Ltd. and Paytm Payments Bank have never been the subject of an investigation by the Enforcement Directorate,” said a spokesperson for Paytm Payments Bank, referring to the parent company of the bank, the digital payments operator known as Paytm.
“Certain traders using our platforms have been investigated and we respond to authorities on this matter when asked. We strongly refute allegations of money laundering and caution you against speculation.” added the spokesperson.
The RBI, the Enforcement Directorate, the finance ministry, the home ministry and the prime minister’s office did not respond to requests for comment outside normal office hours.
The RBI on Wednesday ordered Paytm Payments Bank to shut down most of its businesses, including deposits, credit products and its popular wallet by February 29.
She cited “persistent non-compliance and ongoing material supervisory concerns at the bank,” without elaborating.
The Enforcement Directorate will investigate Paytm Payments Bank if evidence of illegal activities is found, Sanjay Malhotra, revenue secretary, told Reuters on Saturday.
Paytm’s stock plunged 36% in the two days following the RBI’s decision against its bank, wiping $2 billion from its market value.
Paytm founder Vijay Shekhar Sharma, a star of India’s startup scene, described the RBI’s action as a “speed bump” in a conference call with analysts on Thursday.
Two of the sources said that several Paytm Payments Bank accounts were linked to the same proof of identity and transactions in these accounts were in millions of rupees.
An “unusually” high number of dormant accounts were also discovered, one of them added. (Reporting by Sarita Chaganti Singh in New Delhi and Ira Dugal in Mumbai; Editing by Mark Potter)
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