paytm crisis: ED, authorities have been sending notice, request to Paytm for info on customers: OCL

One97 Communications, which provides financial services under the Paytm brand, and its banking arm Paytm Payments Bank have been receiving notices and requests for information with respect to customers of the respective entities, an exchange filing stated on Wednesday. Paytm said that its associate Paytm Payments Bank Limited does not undertake outward foreign remittances.

“One 97 Communications Limited (OCL), its subsidiaries and its associate, Paytm Payments Bank Limited, have over time been receiving notices and requisition for information, documents and explanations from the Authorities, including Enforcement Directorate (ED), with respect to the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the Authorities,” Paytm said in a regulatory filing.

Paytm said that the company and its associate have continued to provide information, documents and explanations to the authorities as required by them.

The statement has come amid a meltdown in Paytm shares, which tanked 10 per cent on Wednesday after media reports claimed that a preliminary inquiry has been launched by ED against Paytm Payments Bank for alleged FEMA violations.

Paytm shares have nosedived around 18 per cent since Tuesday to hit the all-time low of Rs 342.35.

Earlier this month, the Enforcement Directorate and the Financial Intelligence Unit asked the RBI to share its report on the recent action taken to bar Paytm Payments Bank Ltd from accepting deposits or top-ups in customer accounts, according to sources.

The central bank, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags and other instruments after February 29. The Financial Intelligence Unit (FIU) has also sought the report from the RBI to analyse whether Paytm or PPBL followed the required procedures as a “reporting entity” under section 13 of the PMLA.

Under this section of the anti-money laundering law, a financial institution, bank or intermediary has to furnish details to the FIU about maintaining records of all transactions and documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients.