Written by Sarita Chaganti Singh and Ira Dugal
NEW DELHI (Reuters) – India's central bank has discovered hundreds of thousands of Paytm Payments Bank accounts that were created without proper identity verification and passed the information to the country's financial crime agency, it said. This was revealed by three sources familiar with the matter.
The Reserve Bank of India (RBI) is concerned that some of the accounts may have been used for money laundering, the people said, speaking on condition of anonymity.
Besides informing the Enforcement Directorate, the RBI has also sent the findings to the Ministry of Home Affairs and the Prime Minister's Office, it added.
“One 97 Communications Ltd. and Paytm Payments Bank have never been investigated by the Enforcement Directorate,” a Paytm Payments Bank spokesperson said in a statement. I mentioned businesses.
“Some merchants using our platform are the subject of investigations and are responding to questions from authorities at any time. We strongly refute the money laundering allegations and caution against speculation. “We do,” the spokesperson added.
The RBI, Executive Directorate, Finance Ministry, Home Ministry and Prime Minister's Office did not respond to requests for comment outside normal working hours.
The RBI on Wednesday ordered Paytm Payments Bank to wind down most of its operations, including deposits, credit products and its popular wallet, by February 29.
The report cited “persistent non-compliance and continuing significant supervisory concerns at banks” but did not elaborate.
Revenue Secretary Sanjay Malhotra told Reuters on Saturday that the Enforcement Directorate will investigate Paytm Payments Bank if evidence of illegal activities is found.
Paytm's stock price fell 36% in two days following the RBI's move against banks, wiping $2 billion off its market capitalization.
Vijay Shekhar Sharma, founder of Paytm and a fringe star of India's startup world, described the RBI's action as a “speed bump” in a conference call with analysts on Thursday.
Two of the sources said multiple Paytm Payments Bank accounts were linked to the same identity card and transactions in those accounts amounted to millions of rupees.
An “unusual” number of dormant accounts were also found, one of them added.
(Reporting by Sarita Chaganti Singh in New Delhi and Ira Dugal in Mumbai; Editing by Mark Potter)
