Hours after reports emerged of a case being initiated against Paytm Payments Bank Ltd (PPBL) for alleged violations of foreign exchange laws, Paytm issued a clarification on Wednesday. In the statement, One 97 Communications Limited, the parent company of Paytm, stated that its subsidiaries and PPBL have been receiving notices and requests for information, documents, and explanations from authorities, including the Enforcement Directorate (ED).
The company emphasized that its associate firms have been cooperating with the authorities by providing the required information, documents, and explanations. Additionally, Paytm clarified that its associate entity, Paytm Payments Bank Limited, does not engage in outward foreign remittance.
Earlier reports indicated that the central probe agency was examining whether platforms operated by One 97 Communications had violated foreign exchange regulations. Reuters, citing sources, mentioned that the fintech company was being scrutinized under specific provisions of the Foreign Exchange Management Act (FEMA), which governs individual and corporate overseas transfers.
However, India Today reported that the Enforcement Directorate (ED) had not filed an enforcement case information report on this matter. Currently, both the ED and the Reserve Bank of India (RBI) are the only entities investigating the issue. Initially, Paytm had refuted allegations of ED investigating the firm and its subsidiary, Paytm Payments Bank Ltd (PBBL), for breaches of foreign exchange laws.
In a filing to the stock exchange, One97 Communications Ltd (OCL) stated that it denies any reports of investigation or violation of Foreign Exchange rules by the Company or its associate PBBL. OCL clarified its position to address recent misinformation, factual inaccuracies, and speculation in the media reports. The company emphasized transparency and protection of its reputation, customers, shareholders, and stakeholders from unwarranted and speculative stories.
Furthermore, OCL reiterated that it had filed a specific clarification the previous day, categorically denying any investigation by the Enforcement Directorate into OCL, its associates, or management. OCL expressed disappointment at additional media reports making baseless speculations about investigations into the company or its associate, Paytm Payments Bank Limited (PPBL), for foreign exchange rule violations. OCL firmly reiterated that neither the company nor its associate, Paytm Payments Bank Limited, are the subjects of any such investigation.
