One97 Communications, Paytm's parent company, has denied allegations that the Enforcement Directorate (ED) is investigating the firm or its founder and CEO, Vijay Shekhar Sharma, for money laundering. The explanation comes in response to recent media reports indicating an ongoing investigation by the ED. The regulatory filing comes as many media reports state that Paytm is being investigated by various agencies for suspected breaches of customer KYC and the Prevention of Money Laundering Act.

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Image: Paytm

ED's Previous Visit to Investigate Merchants

In September 2022, the ED visited the offices of Paytm and other fintech companies, including Razorpay, as part of money laundering investigations into specific merchants utilising their systems. However, Paytm emphasises that neither the firm nor its CEO are being investigated for money laundering.

Paytm says that it has routinely cooperated with authorities in previous inquiries involving merchants or customers on its platforms. “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. During any such investigations by the authorities on any set of merchants/users in the past, we have cooperated with them on these investigations,” the regulatory filing stated.

The business reiterates its commitment to complying with Indian laws and taking regulatory rulings very seriously.

Paytm categorically denies involvement in anti-money laundering operations. The corporation claims that it has always followed Indian laws and regulations and takes regulatory compliance extremely seriously.

Recent RBI Orders on Paytm Payments Bank

Paytm's response follows recent controversy surrounding the firm. The Reserve Bank of India (RBI) has issued an order prohibiting Paytm Payments Bank Ltd from accepting new deposits, executing credit transactions, or topping up user accounts, prepaid instruments, wallets, and cards used to pay road tolls after February 29. In response, Paytm has declared that it will shift its financial settlement services to third-party lenders.

Paytm Payments Bank Limited (PPBL) is an affiliate of One97 Communications Limited (OCL), with OCL directly and indirectly owning 49% of PPBL's paid-up share capital. Vijay Shekhar Sharma, Paytm's founder and CEO, owns 51% of the bank.

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