One97 Communications, the parent company of Paytm, is currently under scrutiny by the Reserve Bank of India (RBI) for alleged irregularities in its payment bank operations. The company has refuted reports suggesting that it is facing a regulatory probe to investigate potential violations of foreign exchange norms.
According to a regulatory filing, One97 Communications Ltd (OCL) stated that neither the company nor its banking arm, Paytm Payments Bank Limited (PPBL), is under investigation by India’s Enforcement Directorate (ED) for alleged violations.
The clarification comes in response to reports from Reuters, which cited government sources indicating that the ED is examining whether platforms operated by Paytm were involved in breaches of foreign exchange regulations.
On January 31, the RBI instructed Paytm Payments Bank to cease accepting fresh deposits and conducting credit transactions after February 29. Additionally, the bank has been prohibited from receiving top-ups in any customer accounts, including prepaid instruments, wallets, FASTags, and NCMC cards.
The RBI’s directive followed a Comprehensive System Audit and compliance validation report by external auditors, revealing persistent non-compliance and significant supervisory concerns within the bank, prompting further regulatory action.
As a result, Paytm’s stock experienced a sharp decline of approximately 40 percent in consecutive stock market trading sessions, with a marginal recovery observed on Tuesday.