- Paytm is facing trouble under FEMA for possible violations related to its Payments Bank.
- RBI ordered Paytm Payments Bank to stop most services due to non-compliance.
- Paytm’s parent company denied allegations and formed a committee to ensure compliance.
The issues surrounding Paytm just won’t go away. They’re facing some serious trouble. There’s a case against them under a law called FEMA, which deals with foreign exchange.
It’s because of things related to Paytm Payments Bank. There are concerns that they might have broken rules about money going out of the country.
Sources from the government told Reuters about this. The Enforcement Directorate (ED) is looking into it. But they haven’t officially started any action yet. Right now, it’s just the ED and the Reserve Bank of India (RBI) checking things out.
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At first, Paytm said there was no investigation by the ED into them or their bank. They made it clear in a filing with the stock exchange. They’re saying there’s no truth to the reports about them breaking foreign exchange laws. They’re doing this to be open and clear with their customers and investors.
The parent company of Paytm, One97 Communications Ltd, has also spoken up. They’re denying any investigation into them or their bank. They’re saying these reports are just rumors and speculation. They want to make sure their reputation isn’t harmed by false stories.
Last month, the RBI told Paytm Payments Bank to stop a lot of their services by the end of February. This includes things like taking deposits and offering credit. They even have to close down their digital wallets, which many people use. The RBI says they’ve been breaking the rules for a while now.
The governor of RBI, Shaktikanta Das, explained why they took action. He said they gave Paytm enough time to fix things. But since they didn’t, the RBI had to step in. They want to make sure everyone follows the rules, and they don’t take action lightly.
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To deal with these issues, Paytm’s board has set up a special committee. It’s chaired by M Damodaran, who used to head another financial organization. They want this committee to help them follow all the rules properly. They’ve got experienced people on it, including someone from the RBI.
This committee will work closely with Paytm’s board to make sure everything is done by the book. They’re serious about fixing any problems and following the rules from now on. It’s a big step for Paytm to show they’re committed to doing things right.