Synopsis
On March 1, 2025, Paytm announced its plan to resolve alleged FEMA violations linked to its acquired subsidiaries, Little Internet and Nearbuy. The company emphasized that these issues arose from transactions prior to their acquisition and reassured users of continued operational security.Key Takeaways
- Paytm is addressing FEMA allegations linked to subsidiaries.
- Allegations relate to transactions before subsidiary acquisition.
- Paytm's operations remain unaffected and secure.
- The company is seeking legal advice and regulatory remedies.
- Recent settlement with SEBI highlights compliance efforts.
New Delhi, March 1 (NationPress) Digital payments and financial services leader Paytm announced on Saturday its intention to address allegations of FEMA violations concerning two of its acquired subsidiaries — Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).
In a statement to the stock exchange, the company clarified that certain alleged violations are linked to these subsidiaries concerning transactions that occurred before they were integrated into Paytm.
The allegations originated from a show-cause notice (SCN) issued to Paytm by the Directorate of Enforcement (ED) on February 28, 2025, concerning purported breaches under the Foreign Exchange Management Act, 1999 (FEMA) for transactions conducted between 2015 and 2019.
Paytm has stated it is seeking legal counsel and assessing suitable remedies through the regulatory framework.
The company emphasized that a segment of the alleged violations pertains to a time frame prior to its investment in Little and Nearbuy, underscoring that these transactions took place before the subsidiaries were acquired.
Paytm also confirmed that this issue does not disrupt its operations. All features on the Paytm app continue to function smoothly and securely, with no repercussions for users or merchants.
Paytm reiterated its dedication to transparency, governance, and compliance with regulations.
The company mentioned it is tackling the situation with a view to resolving it in accordance with applicable laws, while continuing to support its vast user base and merchant partners.
Last month, the Securities and Exchange Board of India (SEBI) issued a settlement order against Paytm Money after the company paid Rs 45.5 lakh to settle allegations of regulatory breaches. This settlement enables the financial services provider to avert further legal actions related to this matter.
The case began following a show-cause notice from SEBI to Paytm Money on July 24, 2024, concerning non-compliance with the regulator’s technical glitch framework.
