Penalty On Paytm Payments Bank Ltd by the Financial Intelligence Unit-India (FIU-IND)

March 2, 2024

GS Paper II Polity

Context:

The Financial Intelligence Unit-India (FIU-IND) imposed a penalty on Paytm Payments Bank Ltd concerning the violations of its obligations under the PMLA.

Financial Intelligence Unit imposes Rs 5.49 Crore Fine on Paytm Payments Bank

Issued by: The order was issued by the Director FIU-IND under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002 read with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005

Charges: The review was initiated because of allegations of money Laundering by entities engaged in illegal activities like organizing and facilitating online gambling etc through bank accounts maintained with the Paytm Payments Bank Ltd.

The Prevention of Money Laundering Act 2002

About: It is an act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering.
In effect: It forms the core of the legal framework to combat money laundering. It came into force with effect from July 1, 2005.
Implementing Authority: FIU-IND Director and Director (Enforcement) have exclusive and concurrent powers under the Act to implement the provisions of the Act.
Objective: The act imposes an obligation on banking companies, financial institutions, and intermediaries and persons carrying on a designated business or profession, to verify identity of clients, maintain records and furnish information to FIU-IND.
Punishment: The crime is punishable with rigorous imprisonment for a term of minimum three years but which may extend to seven years and shall also be liable to fine

The Financial Intelligence Unit-India (FIU-IND)

Established: It was set up by the Government of India in 2004
Objective: It acts as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
Nodal Ministry: Ministry of Finance
Line of Command: FIU-IND is an independent body and reports directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.
Personnel: It has a sanctioned strength of 75 personnel, FIU is a multi-disciplinary body with its staff inducted from various agencies as under,
- Central Board of Direct Taxes (CBDT), Central Board of Excise and Customs (CBEC), Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Department of Legal Affairs and Intelligence agencies.
Function of Financial Intelligence Unit-India (FIU-IND)

- It is responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing global efforts against money laundering and financing of terrorism.

Also Read: RBI Report On Panchayati Raj Finance

News Source: PIB

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