ED initiates preliminary probe against Paytm Payments Bank, days after RBI ban: Report

The Enforcement Directorate (ED) on Wednesday (February 14) initiated a preliminary probe against Paytm Payments Bank (PPBL), Reuters said quoting a CNBC TV 18 report.

The probe follows the Reserve Bank of India’s (RBI) ban on the bank from accepting new deposits from February 29.

Recently, RBI Governor Shaktikanta Das also ruled out any intention to review the action taken against the ban.

“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,” Das had told reporters.

He also said that RBI takes action against regulated entities only after a comprehensive assessment.

Paytm told CNBC-TV 18 that the company has always complied with RBI requirements “dutifully”.

The ED is said to probe if Paytm and its subsidiary, PPBL was involved in FEMA violations.

Paytm, however, has denied reports of any probe against the company or its founder Vijay Shekhar Sharma.

“We have consistently assured that neither Paytm nor any of its associates are under investigation by any regulatory agency. This stance has been further validated by recent statements from senior government officials. Our commitment remains unwavering towards operating in compliance with regulatory guidance and continuously enhancing our processes to further the reach of digital payments across India,” the company said in a statement.

During a meeting between Sharma and Finance Minister Nirmala Sitharaman last week, the latter told the Paytm boss that the RBI action was a regulatory exercise and the government cannot interfere in it.

In a major action against PPBL, RBI, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags and other instruments after February 29.