India payment gateway Paytm refutes forex norm violations post RBI action

One97 Communications, the parent company of Paytm, is currently under scrutiny by the Reserve Bank of India (RBI) for alleged irregularities in its payment bank operations.

One97 Communications, the parent company of Paytm, is currently under scrutiny by the Reserve Bank of India (RBI) for alleged irregularities in its payment bank operations. Dismissing reports suggesting a regulatory probe to determine potential violations of foreign exchange norms, the company clarified that neither it nor its banking arm, Paytm Payments Bank Limited (PPBL), is under investigation by India’s Enforcement Directorate (ED) for such alleged breaches.

In a regulatory filing, One97 Communications Ltd. (OCL) refuted claims of any investigation or violations of foreign exchange rules. This statement comes in response to Reuters' report, based on information from two government sources, indicating that the ED is probing whether platforms associated with Paytm were engaged in foreign exchange rule violations.

The central bank of India issued a directive on January 31, instructing Paytm Payments Bank to cease accepting fresh deposits and conducting credit transactions after February 29. Additionally, the bank was prohibited from receiving top-ups in any customer accounts, including prepaid instruments, wallets, FASTags, and NCMC cards.

The RBI's decision to take action against Paytm Payments Bank followed a comprehensive system audit and compliance validation report by external auditors, which highlighted persistent non-compliance and significant supervisory concerns, prompting further regulatory action.

As a consequence of the RBI's intervention, Paytm's stock experienced a sharp decline of approximately 40 percent in consecutive trading sessions. However, there was a slight recovery observed on Tuesday following the initial market turbulence.

The company's response aims to dispel any concerns regarding regulatory scrutiny and emphasizes its commitment to compliance with applicable laws and regulations.

Read also: GCC firms rush into Saudi Arabia, seizing $3 trillion opportunities

Follow Us on Follow Alwast News at Google News
Join Telegram channel