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Indian regulator Financial Intelligence Unit has imposed a fine of 55 million rupees (approximately $663,000) on Paytm’s banking business over money laundering allegations. The penalty was levied following a review that revealed Paytm Payments Bank’s involvement with businesses engaged in illicit activities, such as online gambling, which were channeling funds through the bank’s accounts.
In response, Paytm Payments Bank clarified that the fine is related to issues within a business segment that was discontinued two years ago. The bank asserted that it has since strengthened its monitoring systems to prevent such activities.
This development coincides with increased scrutiny from the Reserve Bank of India (RBI) on Paytm Payments Bank, leading to stringent curbs and impacting the share price of its parent company. In an attempt to address concerns raised by the central bank and the market, Paytm has taken steps to terminate “various inter-company agreements” with its business bank.
The regulatory actions highlight the challenges faced by financial institutions in navigating compliance issues and maintaining adherence to anti-money laundering protocols in the evolving digital financial landscape. Paytm’s efforts to strengthen its monitoring mechanisms underscore the ongoing commitment to regulatory compliance in the financial sector.
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