India fines fintech company Paytm over online gambling

Jenny Ortiz March 6, 2024

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

FIU-IND also froze bank accounts associated with Chinese apps in a coordinated effort.

According to the FIU-IND, intelligence gathered from law enforcement agencies revealed that various entities were involved in organizing and facilitating online gambling activities, with the proceeds being channelled through Paytm bank accounts.

This penalty followed a thorough investigation, including a show cause notice and consideration of Paytm’s responses.

The FIU-IND concluded that the charges against Paytm were well-founded based on substantial evidence.

Paytm vows to improve monitoring, reporting mechanisms

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

In addition to the fine imposed on Paytm, the Enforcement Directorate, India’s central government’s money laundering watchdog, has been conducting investigations into the company since 2021 for alleged money laundering, illegal gambling, and cryptocurrency-related irregularities.

The Reserve Bank of India had previously prohibited Paytm from acquiring new customers in early 2023 and instructed the suspension of all banking activities by last month.

Chinese-controlled gambling ops, loan apps frozen

Additionally, the Enforcement Directorate has frozen approximately US$15 million (€13.8 million) in bank deposits following raids in Mumbai, Kochi, and Chennai, which uncovered evidence of Chinese-controlled gambling operations and illegal loan apps.

These raids revealed the presence of mule accounts and shell companies disguising proceeds destined for shell entities in Singapore.

The Enforcement Directorate’s investigations have intensified across various aspects of online gambling operations, including payments, domestic website operations, and agents representing foreign-based operators, particularly considering the surge in online gambling during the COVID-19 pandemic.

SiGMA Africa – less than one week away!

Just less than a week away until the highly anticipated SiGMA Africa event kicks off in Cape Town, South Africa on the 11th of March, the gaming industry is abuzz with excitement. Building on the success of its inaugural edition in Nairobi, Kenya, in January 2023, SiGMA Africa is strategically positioning itself at the forefront of Africa’s burgeoning gaming landscape. With the continent’s market poised for exponential growth, driven by a rapidly evolving digital ecosystem and increasing mobile connectivity, SiGMA Group recognizes the need to foster collaboration and innovation within the industry. By bringing together leading stakeholders and visionaries in gaming, SiGMA aims to catalyse progress and propel Africa toward a new era of prosperity and opportunity. As the countdown to the event begins, anticipation mounts for what promises to be a landmark gathering of gaming enthusiasts and innovators in the vibrant city of Cape Town.