SUMMARY

FIU has identified around 50,000 accounts lacking proper KYC verification and potentially engaged in suspicious transactions and money laundering activities

Approximately 30,000 of these accounts belong to payment banks other than Paytm Payments Bank

The lapses by such banks include failure to report suspicious transactions, neglecting to maintain beneficial owner details, and registration of multiple users using a single income tax PAN

In the wake of the Reserve Bank of India’s (RBI) crackdown on Paytm Payments Bank, more payment banks are likely to face regulatory action as the Financial Intelligence Unit (FIU) has identified around 50,000 accounts sans know-your-customer (KYC) verification and potentially engaged in suspicious transactions and money laundering activities.

Approximately 30,000 of these accounts belong to payment banks other than Paytm Payments Bank. The Reserve Bank of India (RBI) is currently investigating these accounts and has requested additional information, people familiar with the matter told ET.

The lapses by such banks include failure to report suspicious transactions, neglecting to maintain beneficial owner details, and registration of multiple users using a single income tax permanent account number (PAN). The Financial Intelligence Unit (FIU) is set to provide a comprehensive report outlining these deficiencies affecting payment banks before March 31.

This comes days after the RBI on January 31 barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in its customer accounts for ‘persistent non-compliances’. The bank has also been barred from processing other banking services like UPI facilities and funds transfers from February 29.

While there is no clear clarity on the impact of the RBI’s diktat on Paytm, the fintech giant, in an exchange filing, said it anticipates the restrictions to impact the company’s annual EBITDA by about INR 300-500 Cr.

Meanwhile, the central bank has also reportedly directed the ED to check for suspected breaches at Paytm Payments Bank. In the middle of all this, Paytm’s shares declined 5% on (February 15) Thursday to touch 52 week-low at INR 325.30 apiece at the opening. The shares were trading at INR 328.5 apiece at 11:00 am on BSE on Thursday.

The company’s stock has been on a free fall following the RBI’s action on its payments bank and has tanked more than 50% in the last two weeks.

SUMMARY

FIU has identified around 50,000 accounts lacking proper KYC verification and potentially engaged in suspicious transactions and money laundering activities

Approximately 30,000 of these accounts belong to payment banks other than Paytm Payments Bank

The lapses by such banks include failure to report suspicious transactions, neglecting to maintain beneficial owner details, and registration of multiple users using a single income tax PAN

In the wake of the Reserve Bank of India’s (RBI) crackdown on Paytm Payments Bank, more payment banks are likely to face regulatory action as the Financial Intelligence Unit (FIU) has identified around 50,000 accounts sans know-your-customer (KYC) verification and potentially engaged in suspicious transactions and money laundering activities.

Approximately 30,000 of these accounts belong to payment banks other than Paytm Payments Bank. The Reserve Bank of India (RBI) is currently investigating these accounts and has requested additional information, people familiar with the matter told ET.

The lapses by such banks include failure to report suspicious transactions, neglecting to maintain beneficial owner details, and registration of multiple users using a single income tax permanent account number (PAN). The Financial Intelligence Unit (FIU) is set to provide a comprehensive report outlining these deficiencies affecting payment banks before March 31.

This comes days after the RBI on January 31 barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in its customer accounts for ‘persistent non-compliances’. The bank has also been barred from processing other banking services like UPI facilities and funds transfers from February 29.

While there is no clear clarity on the impact of the RBI’s diktat on Paytm, the fintech giant, in an exchange filing, said it anticipates the restrictions to impact the company’s annual EBITDA by about INR 300-500 Cr.

Meanwhile, the central bank has also reportedly directed the ED to check for suspected breaches at Paytm Payments Bank. In the middle of all this, Paytm’s shares declined 5% on (February 15) Thursday to touch 52 week-low at INR 325.30 apiece at the opening. The shares were trading at INR 328.5 apiece at 11:00 am on BSE on Thursday.

The company’s stock has been on a free fall following the RBI’s action on its payments bank and has tanked more than 50% in the last two weeks.