- By Vivek Raj
- Sat, 03 Feb 2024 03:55 PM (IST)
- Source:JND
Enforcement Directorate (ED) would investigate Paytm Payments Bank if new allegations of fund mismanagement arise, Revenue Secretary Sanjay Malhotra said, according to the Reuters news agency. Malhotra highlighted that any fresh charges of money laundering against Paytm, as flagged by the Reserve Bank of India (RBI), will be thoroughly examined in accordance with the law.
"If there are any fresh charges of money laundering against Paytm by RBI, those will be investigated by the Directorate of Enforcement as per the law of the land," said Malhotra.
Bloomberg reported on Saturday that the RBI is contemplating revoking the license of Paytm Payments Bank Ltd. as early as next month. The central bank's primary concern is to safeguard depositors, and actions may be taken after the February 29 deadline, when Paytm Payments Bank is required to halt customer deposits into savings accounts or the digital payment wallet.
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Paytm, backed by SoftBank Group Corp., has faced regulatory scrutiny over the past few years due to questionable transactions between its payments app and banking division. While the RBI suspended a significant portion of the payments bank’s operations earlier this week, revoking its license would be viewed as a more severe measure.
Vijay Shekhar Sharma, founder and CEO of One97 Communications Ltd (OCL), reassured users that Paytm remains committed to serving the nation in full compliance. He affirmed that the app will continue functioning beyond February 29 as usual.
Paytm clarified that the RBI's order does not affect user deposits in their savings accounts, wallets, FASTags, and NCMC accounts, ensuring customers can continue using existing balances. However, Paytm's top management indicated during an earnings call that they are devising a migration plan for PPBL, wallet, FASTag, etc., users to transition to other banks.
Operating as a restricted bank without lending capabilities, Paytm Payments Bank is majority-owned by Paytm CEO Vijay Shekhar Sharma, with Paytm parent One 97 Communications Ltd. holding the remaining stake.