Paytm On FEMA Probe: Received Notices From ED, No Outward Foreign Remittances Undertaken

Paytm operator One97 Communications Ltd. clarified that it has been receiving notices from authorities including the Enforcement Directorate.

It also said that its associate, Paytm Payments Bank Ltd., does not undertake outward foreign remittances.

The company has over time been receiving notices and requisitions for information, documents, and explanations from the authorities—including the Enforcement Directorate—the company said in an exchange filing on Wednesday.

The crisis-hit company received notices regarding customers who may have done business with the respective entities. The company said that it provided the required information, documents and explanations to the respective authorities.

This response comes after the stock exchanges sought clarification on reports that the Enforcement Directorate has registered a case against Paytm under Foreign Exchange Management Act violations.

According to media reports, the Paytm operator was under the Enforcement Directorate's scanner, which launched a money laundering probe against Paytm Payments Bank. In an earlier notification, the firm denied any violation of foreign exchange rules.

Since the Reserve Bank of India found major supervisory concerns and persistent non-compliance from the company's payment banks, the shares of the company have taken a severe beating.

The shares have fallen over 43% to Rs 342.15 apiece, since its closing on Jan. 31. During the same period, the market capitalisation of the company has fallen by 55% to Rs 217.31 billion on Wednesday, from Rs 483.42 billion on Jan. 31.