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

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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RBI reprimands Paytm Payments Bank

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.