India’s Paytm says company, CEO not under money laundering probe

INDIAN fintech Paytm said on Sunday (Feb 4) the company and its founder and chief executive officer Vijay Shekhar Sharma were not under investigation by the country’s anti-money laundering agency.

India’s central bank found several lapses at Paytm Payments Bank including multiple transactions beyond regulatory limits, raising money-laundering concerns, Bloomberg News reported previously.

“In the past, certain merchants/users on our platforms have been subject to enquiries and on those occasions, we have always cooperated with the authorities,” Paytm parent One 97 Communications said in a disclosure to stock exchanges. The company has also cooperated with state agencies on such probes, it added.

Sharma owns 51 per cent in the payments bank, which can take deposits of up to 200,000 rupees (S$3,238) but is not allowed to lend. One 97 Communications owns the remaining stake.

The Reserve Bank of India (RBI) on Jan 31 issued an order that bars Paytm bank from taking deposits or allowing top-ups after Feb 29. The banking regulator is also considering scrapping the license of Paytm Payments Bank as early as March.

SoftBank Group-backed Paytm has been in the cross-hairs of the regulator for some time, with multiple warnings over the past two years about questionable dealings between its banking arm and its popular payments app.

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After the RBI order, Paytm shares tumbled by their daily limit of 20 per cent each on Thursday and Friday, erasing US$2 billion in market value. BLOOMBERG