The Economic Times has reported that after the Reserve Bank of India’s crackdown on Paytm Payments Bank, more banks are under the scanner for compliance with regulatory norms aimed at curbing money laundering.
The Financial Intelligence Unit (FIU) has identified around 50,000 bank accounts without proper know-your-customer (KYC) documents, raising suspicions of money laundering. Although 30,000 of these accounts were linked with Paytm Payments Bank, additional investigation is being conducted into the remaining accounts.
FIU has already submitted a detailed report to the Reserve Bank of India (RBI), which has requested further information on the matter. Some of the major lapses by payment banks include disregarding suspicious transactions, discrepancies in KYC documents, and the registration of multiple accounts using one PAN number.
According to the report, FIU has been asked to provide a detailed report to RBI by March 31. A senior government official stated, “There were 175,000 accounts which were non-compliant, out of which 50,000 were engaged in activities suspicious in nature and used for money laundering.”
Furthermore, the FIU has expanded its investigation into other payment banks, seeking information under Section 13 of the Prevention of Money Laundering Act (PMLA).
The controversy surrounding Paytm Payments Bank began when the RBI issued a deadline of February 29 to the bank, ordering it to halt all transactions and deposits following a regulatory lapse discovered in an FIU report. Additionally, the Enforcement Directorate (ED) was investigating the Mahadev app scam and identified approximately 10,000 UPI accounts registered with Paytm that were allegedly being used for money laundering.
In response to reports, Paytm’s parent company, One 97 Communications, clarified that no ED probe has been launched against the company regarding money laundering or FEMA violations, dismissing the reports as “malicious.”
