NEW DELHI: India’s central bank found hundreds of thousands of accounts created without proper identification at Paytm Payments Bank and passed the information on to the country’s financial crime agency, three sources familiar with the matter said.
The Reserve Bank of India (RBI) is concerned that some of the accounts may have been used for money laundering, the sources said on condition of anonymity.
Apart from informing the Enforcement Directorate, the RBI has sent its findings to the Ministry of Home Affairs and the Prime Minister’s Office, they added.
“One 97 Communications Ltd. and Paytm Payments Bank were never investigated by the Enforcement Directorate,” a Paytm Payments Bank spokesperson said, referring to the bank’s parent company, the digital payments operator popularly known as Paytm.
“Some merchants using our platforms have been subject to investigation and we are responding to the authorities on this matter as and when requested. We vehemently deny allegations of money laundering and caution you against speculation,” the spokeswoman added.
The RBI, the Enforcement Directorate, the Finance Ministry, the Home Ministry and the Prime Minister’s Office did not respond to requests for comment outside normal business hours.
The RBI on Wednesday directed Paytm Payments Bank to wind down most of its businesses, including deposits, credit products and the popular wallet, by February 29.
It cited “ongoing non-compliance and continuing serious supervisory concerns at the bank,” without giving details.
The Enforcement Directorate will investigate Paytm Payments Bank if any evidence of illegal activity is found, Revenue Minister Sanjay Malhotra told Reuters on Saturday.
Shares of Paytm plunged 36% in two days after the RBI’s move against its bank, wiping $2 billion off its market value.
Paytm founder Vijay Shekhar Sharma, a star of India’s startup scene, described the RBI’s action as an “acceleration” during a conference call with analysts on Thursday.
Two of the sources said multiple Paytm Payments Bank accounts were linked to the same identity document and transactions in these accounts ran into crores of rupees.
An “unusually” large number of dormant accounts were also found, one of them added.
