After Paytm, more payments banks under RBI scanner for money laundering

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After the Reserve Bank of India cracked down on Paytm Payments Bank last month, more banks are under the scanner for compliance with regulatory norms to curb money laundering, said The Economic Times reported.

RBI headquarters in Mumbai (PTI FILE)

The Financial Intelligence Unit (FIU) has detected around 50,000 bank accounts without proper know-your-customer (KYC) documents, triggering suspicion of money laundering, ET reported While 30,000 of these accounts were linked with Paytm Payments Bank, additional probe is being launched into the rest of the accounts.

FIU has already sent a detailed report regarding the same to the Reserve Bank of India (RBI), which has sought additional information regarding the same, the ET report added.

Some of the major lapses by payment banks include looking over suspicious transactions, KYC documents discrepancies and the registration of multiple accounts using one PAN number, according to the report.

FIU has been asked to submit a detailed report regarding the same to RBI by March 31. A senior government officer told ET, “There were 175,000 accounts which were non-compliant, out of which 50,000 were engaged in activities which were suspicious in nature and used for money laundering.”

The official further said that the FIU report on Paytm Payments Bank was given to the RBI four months ago. The list of violations by the Paytm bank is not just limited to KYC violations, but include other irregularities.

Now, FIU has broadened its investigation into other payment banks, seeking information under Section 13 of the Prevention of Money Laundering Act (PMLA).

Paytm Payments Bank controversy

The RBI on January 31 issued a deadline of February 29 to Paytm Payments Bank, ordering to stop all its transactions and deposits from the date after an FIU report discovered a regulatory lapse on the bank’s part.

ED was also probing the Mahadev app scam and detected about 10,000 UPI accounts registered with Paytm that were allegedly being used for money laundering.

After the RBI crackdown on Paytm Payments Bank, its parent company One 97 Communications clarified that no ED probe has been launched against the company regarding money laundering or FEMA violations, terming the reports as “malicious”.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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