Paytm, 2 subsidiaries receive notice for FEMA violations worth ₹611 crore

Paytm, 2 subsidiaries receive notice for FEMA violations worth ₹611 crore

Paytm, 2 subsidiaries receive notice for FEMA violations worth ₹611 crore ByAshley Paul Mar 01, 2025 09:10 PM IST Share Via Copy Link Paytm-parent One 97 Communications revealed information about the show-cause notices via a disclosure to the exchanges.

One 97 Communications (OCL), the parent firm of online payments platform Paytm, has once again come in the spotlight after it received two show-cause notices for alleged violations pertaining to the Foreign Exchange Management Act (FEMA), 1999.

Paytm Payments Bank was reprimanded by RBI last year, which had led to a massive stock rout.(Reuters)

In its disclosure to exchanges, One 97 said the notices were sent for transactions worth ₹611.17 crore related to the company itself and its investments in two of its subsidiaries - Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).

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The company said certain current and former directors and executives of the company also received the notices.

One 97 noted that the impugned transactions were carried out between 2015 and 2019, when LIPL and NIPL were not its subsidiaries. LIPL is responsible for the largest share of such transactions, at over ₹344.99 crore, followed by OCL, at over ₹245.20 crore.

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The notices did not specify a demand or a penalty, which means there is no immediate financial impact that they will have on One 97.

“To resolve the matter in accordance with applicable laws and regulatory processes, the Company is seeking necessary legal advice and evaluating appropriate remedies,” OCL said in its disclosure.

“Paytm upholds principles of transparency, governance, and compliance in all its business practices. This matter is being addressed with a focus on resolving it in accordance with applicable laws. There is no impact of this matter on Paytm’s services to its consumers and merchants, and all services are fully operational and secure, as always,” it added.

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In February 2024, Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank by directing it to stop onboarding new customers. The central bank had also directed the company to appoint an IT audit firm to conduct a system audit.

The directive was based on “certain supervisory concerns observed in the bank”, RBI had said.