Paytm Payments Bank faces the risk of losing its licence after March 15 and could also see an RBI-appointed administrator stepping in to manage unclaimed deposits and oversee certain critical aspects of the business.
The RBI, on January 31, imposed business restrictions on Paytm Payments Bank, including a bar on accepting fresh deposits and doing credit transactions after March 15. The regulator found major irregularities in KYC, which exposed the customers, depositors and wallet holders to serious risks.
This could mark the first such significant instance in over two decades where the RBI may have to take such a drastic step, it has been reported. This report has not been independently verified by Qrius.
If the RBI-appointed administrator is brought in, the report says, it would be to ensure that any deposit claims made thereafter is repaid to the depositors in a satisfcatory manner.
The Financial Intelligence Unit had earlier slapped a penalty of INR 5.49 crore on the bank for violating anti-money laundering law, under the Prevention of Money Laundering Act (PMLA).
‘The money generated from these illegal operations, that is, the proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank,’ a ministry statement had said.
Vijay Shekhar Sharma stepped down as part-time non-executive Chairman of PPBL and the board of the bank was reconstituted over the developments.
A Paytm Payments Bank spokesperson said the penalty pertains to issues within a business segment that was discontinued two years ago.
‘Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU),’ the spokesperson said.
Paytm shares down 3% on Paytm Payments Bank news
Shares of One97 Communications, owner of the Paytm brand, fell another 3 per cent amid the reports.
The stock has taken a steep hit since the RBI crackdown.
Shares of One97 Communications are trading 10.60 points, or 2.56 per cent lower at INR 403.85 per equity share. During Friday’s trading session, Paytm opened at INR 424.05 and closed at INR 425.45, with a high of INR 430 and a low of INR 410.05. The 52-week high for Paytm was INR 998.3 while the 52-week low was INR 318.35.