Paytm Payments Bank action-1,000 accounts registered on 1 PAN

Money laundering concerns and suspicious transactions worth hundreds of crores of rupees between wallet Paytm and its banking arm led the Reserve Bank of India to crack down on the entities run by Vijay Shekhar Sharma.

According to sources, Paytm Payments Bank Limited (PPBL) had millions of non-KYC (Know Your Customer) compliant accounts and in thousands of cases, the same PAN was used to open multiple accounts. Sources said there are instances where the total value of transactions is in crores of rupees, raising concerns of money laundering.

It was found that more than 1,000 users had the same Permanent Account Number (PAN) linked to their accounts. This came to light during the verification processes conducted by both the RBI and the auditors. Sources said the RBI is concerned that some accounts could be used for money laundering. Along with informing the Enforcement Directorate, the RBI has also sent its findings to the Home Ministry and the Prime Minister's Office.

Revenue Secretary Sanjay Malhotra told Reuters that the Enforcement Directorate would investigate Paytm Payments Bank if any evidence of illegal activity was found.

RBI had directed Paytm Payments Bank Limited not to accept deposits or top-ups in any customer account, prepaid instrument, wallet and Fastag after February 29, 2024.

Giving information in a statement, RBI had said that this step has been taken after the comprehensive system audit report and compliance verification report of external auditors. These reports raised concerns regarding continued non-compliance with regulations and material supervision at the payments bank.

Earlier, on March 11, 2022, RBI had stopped PPBL from adding new customers with immediate effect.

RBI said that Paytm Payments Bank customers will be allowed to withdraw or utilize the balance from their accounts including savings bank accounts, current accounts, prepaid medium, Fastag, National Common Mobility Card (NCMC) without any restriction.

According to an analyst, Paytm Payments Bank has about 35 crore e-wallets. Of these, about 31 crore are inactive, while only about four crore will be active with no balance or very low balance.

Sources said an unusually large number of inactive accounts are suspected to be being used for fake accounts. In such a situation, there have been major irregularities in KYC, due to which customers, depositors and wallet holders had to face serious risks.

Sources said the compliance submitted by the bank was found incomplete and incorrect on several occasions.

Following the RBI directive, shares of One97 Communications Limited, which owns the Paytm brand, have fallen 40 percent in the last two days.