India’s Financial Intelligence Unit (FIU-IND) has fined Paytm, a prominent fintech company, over 54.9 million rupees (€610,165) for activities related to online gambling and for violating anti-money laundering laws.  

FIU-IND also froze bank accounts associated with Chinese apps in a coordinated effort.  The FIU-IND found that several entities were involved in organizing and facilitating online gambling activities, with the proceeds being channelled through Paytm bank accounts.  

Paytm was penalized following a thorough investigation, including a show cause notice and consideration of their responses. The FIU-IND concluded that the charges against Paytm were well-founded based on substantial evidence.  

A bank spokesperson acknowledged the violations, stating that they occurred within a discontinued business segment. They also emphasized improvements in monitoring and reporting mechanisms.  

Paytm was fined, and the Enforcement Directorate, India’s central government’s money laundering watchdog, has been investigating the company since 2021 for alleged money laundering, illegal gambling, and cryptocurrency-related irregularities.   

In early 2023, the Reserve Bank of India had prohibited Paytm from acquiring new customers and instructed the suspension of all banking activities by last month.  Furthermore, the Enforcement Directorate froze approximately US$15 million (€13.8 million) in bank deposits following raids in Mumbai, Kochi, and Chennai. The raids uncovered evidence of Chinese-controlled gambling operations and illegal loan apps.  

The raids uncovered mule accounts and shell companies concealing funds intended for shell entities in Singapore.  

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