The Enforcement Directorate or ED, the central financial crime probe agency, has initiated action against Paytm Payments Bank Limited or PPBL, a unit of One 97 Communications, regarding overseas transactions, as reported by two undisclosed sources.
Earlier, reports from Reuters had indicated that the ED had launched an investigation into One 97 Communications, commonly known as Paytm, over suspicions of violating foreign exchange regulations. The company has refuted these allegations.
According to sources in New Delhi, this inquiry is currently in its preliminary stages. The ED initially sought additional information from the Reserve Bank of India-RBI, which subsequently directed Paytm Payments Bank to curtail a significant portion of its operations due to serious and persistent supervisory concerns by February 29.
Following the RBI’s directive, Paytm has witnessed a substantial decline in its market value, with its stock plummeting by nearly 55 per cent. The company’s shares dropped by nearly 10 per cent on February 14.
Over the past month, Paytm’s stock has experienced a dramatic decline of over 52 per cent, while its value has diminished by more than 60 per cent in the last six months.
This significant downturn in Paytm’s stock price can be primarily attributed to the strict regulatory measures imposed by the RBI against Paytm Payments Bank, highlighting ongoing non-compliance issues.
The RBI’s decision to restrict certain critical operations of the payments bank effective March 1 has raised concerns among both Paytm users and investors alike.
