Paytm Money Settles Case for Violating SEBI Regulations by Paying Fine of INR 45.50 Lakh
In order to resolve a case with SEBI about alleged violations of the standards for the technical fault framework, Paytm Money, the wealthtech subsidiary of Paytm, has paid a fine of INR 45.50 lakh. The market's watchdog stated in a settlement decision that it had sent Paytm Money a show-cause notice for breaking multiple SEBI Act, 1992 provisions:
•Failure to establish the permissible threshold of 70% for the generation of timely notifications for all critical assets.
•Absence of documentation pertaining to the inspection period's peak load.
•Failing to integrate the Logs Analytics and Monitoring Application with all of its vital systems.
•For the first half of fiscal year 2023–2024 (H1 FY24), there will be no live DR drills.
"With a settlement order and a September 17, 2024, settlement application filed with SEBI, the noticee (Paytm Money) proposed to settle the current proceedings brought against it, pending adjudication proceedings, without acknowledging or disputing the findings of facts and conclusions of law," the order stated.
Regulatory Bodies Putting Strict Scanner on Paytm
Earlier, Paytm and its directors and officials, both present and past, settled a complaint with SEBI by paying a total of INR 3.32 Cr. It is important to remember that for the past two years, regulatory agencies have been closely examining Paytm. In 2015, the Reserve Bank of India (RBI) granted in-principle approval to 11 applicants to establish a payments bank, including Paytm.
Due to alleged violations of know your customer (KYC) standards, the central bank prohibited Paytm Payments Bank from onboarding new clients and taking deposits using its services, including FASTag and wallet, in 2024. The payments bank is essentially unable to conduct business as a result of the RBI's crackdown.
The Financial Intelligence Unit-India (FIU-IND) fined Paytm Payments Bank INR 5.49 Cr in March 2024 for breaking the nation's money laundering regulations. The stock of Paytm Payments Bank plummeted as a result of the RBI's crackdown. Additionally, Paytm's market share in the UPI industry has decreased as a result of this.
Response from Paytm
Rajeev Krishnamuralilal, a former IRS and SEBI long-time member, has joined Paytm Money's board as a non-executive independent director, the company announced in a statement. It is important to remember that One 97 Communications, the parent company of Paytm, already has Krishnamuralilal on its board. Apart from his position as a non-executive independent director, Krishnamuralilal will also be the chairwoman of Paytm Money's risk management and corporate social responsibility committees and a member of the audit committee.
Rajeev Agarwal Officially Joins Paytm
Rajeev Krishnamuralilal Agarwal was appointed as an extra non-executive independent director at One97 Communications' wholly-owned subsidiary, Paytm Money, on 13 February 2024.
Agarwal will also assume important responsibilities, such as chairing the Paytm Money Risk Management and Corporate Social Responsibility (CSR) Committees and being a member of the Audit Committee. Having worked for the Indian Revenue Services (IRS) for 28 years, Agarwal brings more than 40 years of expertise to the position. He has worked for the Securities and Exchange Board of India (SEBI) as a full-time member.
Nitin Konde
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