India’s financial crime fighting agency said on Monday its investigation revealed that payment services provider Paytm and its units had violated the country’s Foreign Exchange Management Act to the tune of Rs. 6.11 billion ($70 million).
The Enforcement Directorate (ED) said that Paytm had made a foreign investment in Singapore and did not file the necessary reporting to the Reserve Bank of India (RBI).
Paytm had also received foreign direct investment from overseas investors without following proper pricing guidelines stipulated by RBI, the ED said.
Paytm’s unit, Little Internet, had also received foreign direct investment without following the pricing guidelines stipulated by the RBI, while another unit, Nearbuy India, did not report the foreign direct investment within the stipulated time frame, the agency said.
“We are working towards resolving the matter in accordance with applicable laws and regulatory processes,” a Paytm spokesperson said.
On Saturday, Paytm said the ED notice has no impact on its services to its consumers and merchants.
The ED notice and allegations come as the fintech company awaits a license for payment aggregation from the RBI to accept and disburse payments online.
In January 2024, the RBI had ordered Paytm’s unit Paytm Payments Bank to stop accepting new deposits in its accounts or digital wallets, citing supervisory concerns and persistent non-compliance with rules.
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