Discover the latest twist in the Paytm saga as the Enforcement Directorate launches a surprise investigation into Paytm Payments Bank. Dive into the scandal and unravel the implications for the fintech giant amidst regulatory turmoil.
ED Inquiry Against Paytm Payments Bank
In a recent development, the Enforcement Directorate (ED) has launched a preliminary inquiry into Paytm Payments Bank, as reported by Reuters citing CNBC TV18. This move comes hot on the heels of the Reserve Bank of India (RBI) barring the Paytm subsidiary from accepting new deposits starting February 29.
The Enforcement Directorate’s action deals another blow to PPBL, particularly following the RBI’s firm stance against reconsidering its crackdown on the entity. RBI Governor Shaktikanta Das unequivocally stated, “At the moment, let me say very clearly there is no review of this (PPBL) decision.”
In response to the Enforcement Directorate’s inquiry, Paytm stated to CNBC-TV18, “We have always complied with the requirements dutifully.” However, details regarding the nature of the probe remain undisclosed.
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Previous Speculations and Denials
Earlier reports by Reuters had suggested that the Enforcement Directorate was investigating potential violations of the Foreign Exchange Management Act (FEMA) by Paytm and its Payments Bank. However, both the fintech company and its founder, Vijay Shekhar Sharma, vehemently denied any such investigations. In a statement, Paytm asserted, “We have consistently assured that neither Paytm nor any of its associates are under investigation by any regulatory agency.”
Engagement with Authorities Amid Crisis
Facing mounting challenges, Vijay Shekhar Sharma, CEO of Paytm, engaged with both the RBI and Finance Minister Nirmala Sitharaman last week. Reports indicate that Minister Sitharaman clarified to Sharma that the RBI’s actions were part of a regulatory exercise, with no scope for government intervention. Additionally, the RBI remained steadfast in its decision not to offer concessions to the troubled Payments Bank.
Governor Shaktikant Das emphasized the importance of regulatory compliance, stating, “We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us would have to take action?”
As the saga unfolds, the scrutiny on PPBL intensifies, underscoring the challenges facing the fintech giant amidst regulatory constraints.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and CNBC-TV18 have contributed to the above report