Financial Intelligence Unit of India (FIU -IND) fined well-known financial technology company Paytm more than 54.9 million rupees (610,165 euros) for online gambling and violations of the Anti-Money Laundering Act.
FIU-IND said intelligence gathered from law enforcement agencies revealed that various entities were involved in organizing and facilitating online gambling operations, with proceeds flowing through Paytm's bank accounts.
The penalty was imposed after an in-depth investigation, including sending a Show Cause Notice and considering waiting for Paytm's response.
FIU-IND concluded that the allegations against Paytm were supported by sufficient evidence.
Paytm promised to improve monitoring and reporting mechanisms.
A spokesman for the bank acknowledged the violations and said it had made it clear it would improve its monitoring and reporting mechanisms in the future.
In addition to the fine against Paytm, India's central government's anti-money laundering watchdog, the Enforcement Directorate, has been investigating the company since 2021 for alleged money laundering, illegal gambling and cryptocurrency-related violations.
The Reserve Bank of India banned Paytm from taking on new customers in early 2023 and directed it to cease all banking operations last month.
Separately, the Enforcement Directorate froze around $15 million (€13.8 million) in bank deposits during searches conducted in Mumbai, Kochi and Chennai.
The evidence revealed the existence of dummy accounts and shell companies used to disguise the flow of funds to shell entities in Singapore.
Investigations by the General Directorate of Enforcement have intensified across all aspects of online gambling operations, including payments, domestic website operations and agents representing foreign operators, especially given the surge in online gambling during the COVID-19 pandemic.
