Paytm’s banking division has been fined 55 million rupees (approximately $663,000) by an Indian regulatory authority on money laundering charges.
The Financial Intelligence Unit of India imposed the fine following a review of Paytm Payments Bank, which uncovered connections to businesses involved in illegal activities, including online gambling, that funneled funds through the bank’s accounts.
In response, Paytm Payments Bank has stated that the fine relates to issues within a business segment that was discontinued two years ago, emphasizing that it has since enhanced its monitoring systems.
The penalty arrives amidst heightened scrutiny from the Reserve Bank of India (RBI), which has imposed strict limits on the bank due to compliance issues, impacting the share price of its parent company. In an effort to reassure the central bank and the market, Paytm is now working to terminate “various inter-company agreements” with its banking division.