The Reserve Bank of India (RBI) recently ordered the closure of Paytm Payments Bank, saying that it found “persistent non-compliances and continued material supervisory concerns in the bank”. However, a new report has claimed that it found hundreds of thousands of accounts at Paytm Payments Bank created without proper identification, which may have been used for money laundering.
Citing three sources familiar with the matter, news agency Reuters reported that it has passed the information on to the Enforcement Directorate (ED), the ministry of home affairs and the Prime Minister’s Office.
The ED will probe Paytm Payments Bank, which has been told to wind up its operations by February 29, if any evidence of illegal activity is found, Revenue Secretary Sanjay Malhotra was cited as saying.
Two of the sources claimed that multiple accounts at Paytm Payments Bank were linked to the same identification proof and that transactions in those accounts ran into crores. An “unusually” high number of dormant accounts had also been found, one of them added.
What Paytm has to say
Meanwhile, Paytm has denied money laundering allegations.
“One 97 Communications Ltd. and Paytm Payments Bank have never been probed by the Enforcement Directorate,” a Paytm Payments Bank spokesperson, who was referring to the bank’s parent company, the digital payments operator popularly known as Paytm, was quoted as saying
“Some merchants using our platforms have been the subject of investigations and we answer authorities on this same as and when asked. We strongly refute money laundering allegations and caution you against speculation,” the spokesperson added.
Last week, Paytm’s founder, Vijay Shekhar Sharma, characterised the RBI’s actions as a “speed bump” during a conference call with analysts.
He also noted that the app is working and will continue to work after February 29 as the RBI directive will affect only the Paytm Payments Bank.
“To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual. I, with every Paytm team member, salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it,” he posted on X.

The Reserve Bank of India (RBI) recently ordered the closure of Paytm Payments Bank, saying that it found “persistent non-compliances and continued material supervisory concerns in the bank”. However, a new report has claimed that it found hundreds of thousands of accounts at Paytm Payments Bank created without proper identification, which may have been used for money laundering.
Citing three sources familiar with the matter, news agency Reuters reported that it has passed the information on to the Enforcement Directorate (ED), the ministry of home affairs and the Prime Minister’s Office.
The ED will probe Paytm Payments Bank, which has been told to wind up its operations by February 29, if any evidence of illegal activity is found, Revenue Secretary Sanjay Malhotra was cited as saying.
Two of the sources claimed that multiple accounts at Paytm Payments Bank were linked to the same identification proof and that transactions in those accounts ran into crores. An “unusually” high number of dormant accounts had also been found, one of them added.
What Paytm has to say
Meanwhile, Paytm has denied money laundering allegations.
“One 97 Communications Ltd. and Paytm Payments Bank have never been probed by the Enforcement Directorate,” a Paytm Payments Bank spokesperson, who was referring to the bank’s parent company, the digital payments operator popularly known as Paytm, was quoted as saying
“Some merchants using our platforms have been the subject of investigations and we answer authorities on this same as and when asked. We strongly refute money laundering allegations and caution you against speculation,” the spokesperson added.
Last week, Paytm’s founder, Vijay Shekhar Sharma, characterised the RBI’s actions as a “speed bump” during a conference call with analysts.
He also noted that the app is working and will continue to work after February 29 as the RBI directive will affect only the Paytm Payments Bank.
“To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual. I, with every Paytm team member, salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it,” he posted on X.