ED Initiates Probe Against Paytm Payments Bank Amid RBI Clampdown: Latest Developments

The Enforcement Directorate (ED) has reportedly launched a preliminary inquiry against Paytm Payments Bank, marking another setback for the financial entity, especially in the aftermath of the Reserve Bank of India's (RBI) recent decision to restrict the acceptance of new deposits from February 29. This revelation comes through a CNBC TV18 report, quoting sources on Wednesday.

The ED's involvement adds a new layer of scrutiny to Paytm Payments Bank, given the RBI's firm stance against any reconsideration of its regulatory measures. RBI Governor Shaktikanta Das stated unequivocally, "At the moment, let me say very clearly there is no review of this (PPBL) decision. If you are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision."

Paytm responded to the development, stating, "We have always complied with the requirements dutifully." However, details regarding the nature of the probe remain undisclosed at this time.

Earlier reports from Reuters indicated that the ED was investigating potential FEMA violations involving Paytm and its Payments Bank. Paytm denied any such investigations, emphasizing their commitment to operating in compliance with regulatory guidance.

Founder Vijay Shekhar Sharma, who recently met with both the RBI and Finance Minister Nirmala Sitharaman amid the crisis, received no reprieve. Minister Sitharaman reportedly conveyed that the RBI's actions were part of a regulatory exercise, and the government could not intervene. The central bank also declined to grant concessions to Payments Bank, emphasizing the importance of compliance.

RBI Governor Das addressed the issue last week, stating, "We give sufficient time to every entity to comply, and sometimes more than sufficient time. If they would comply, why would a regulator like us have to take action?" Despite the challenges, Paytm remains steadfast in its commitment to regulatory compliance and enhancing processes to advance digital payments across India.