Thousands of accounts at Paytm Payments Bank have been flagged by India’s central bank for improper identification, raising concerns about potential money laundering activities, according to confidential sources. The Reserve Bank of India (RBI) has forwarded the information to the Enforcement Directorate, as well as the ministry of home affairs and the prime minister’s office. Paytm Payments Bank, facing regulatory scrutiny, denies money laundering allegations, stating that its parent company, One 97 Communications Ltd., and the bank have never been probed by the Enforcement Directorate.
The RBI has ordered Paytm Payments Bank to wind down most of its operations by Feb. 29, citing persistent non-compliances and supervisory concerns. The Enforcement Directorate may launch a probe if evidence of illegal activities is uncovered. Paytm’s stock has witnessed a significant decline, losing $2 billion in market value following the RBI’s directive. Paytm’s founder, Vijay Shekhar Sharma, downplays the regulatory action as a “speed bump” during a conference call with analysts.
Sources reveal that multiple accounts at Paytm Payments Bank were linked to the same identification proof, with transactions running into millions of rupees. Additionally, an unusually high number of dormant accounts have been identified, contributing to the regulatory concerns surrounding the bank.