“Vijay Shekhar Sharma Faces Major Setback as ED Probes Paytm Payments Bank: Report”
In a significant development, the Enforcement Directorate (ED) has initiated a preliminary inquiry against Paytm Payments Bank, marking a fresh setback for the entity, particularly in light of recent regulatory actions by the Reserve Bank of India (RBI). According to reports from Reuters, the central agency’s move comes shortly after the RBI’s directive prohibiting the Paytm subsidiary from accepting new deposits starting February 29.
In a significant development, the Enforcement Directorate (ED) has initiated a preliminary inquiry against Paytm Payments Bank, marking a fresh setback for the entity, particularly in light of recent regulatory actions by the Reserve Bank of India (RBI). According to reports from Reuters, the central agency’s move comes shortly after the RBI’s directive prohibiting the Paytm subsidiary from accepting new deposits starting February 29.
The ED’s inquiry casts a shadow over Paytm Payments Bank, adding to the challenges it faces following the RBI’s stringent measures. Despite Paytm’s assurances of compliance with regulatory requirements, the ED’s scrutiny underscores the seriousness of the situation surrounding the fintech major and its banking arm.
Last week, speculation emerged suggesting that the ED was investigating potential violations of the Foreign Exchange Management Act (FEMA) by Paytm and its Payments Bank division. Although Paytm denied these reports, asserting its commitment to regulatory compliance, the ED’s decision to launch a preliminary inquiry indicates the agency’s intent to thoroughly examine the matter.
Amidst the unfolding crisis, Paytm founder Vijay Shekhar Sharma recently met with officials from both the RBI and Finance Minister Nirmala Sitharaman’s office to address concerns regarding the Payments Bank’s regulatory challenges. However, the government’s stance remained firm, emphasizing that the RBI’s actions were part of a regulatory exercise and beyond government intervention.
Governor Shaktikanta Das reiterated the RBI’s position, stating unequivocally that there would be no review of the decision to impose restrictions on Paytm Payments Bank. The central bank’s stance underscores its commitment to regulatory enforcement and ensuring compliance within the financial sector.
As Paytm navigates these regulatory hurdles, the ED’s inquiry adds another layer of complexity to its ongoing challenges. With regulatory scrutiny intensifying and the company’s reputation at stake, Paytm faces a critical juncture in its efforts to address concerns and regain trust within the financial ecosystem.
Sources By Agencies
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