The Enforcement Directorate has initiated a money laundering investigation against
Paytm Payments Bank Ltd, Republic TV sources said on Wednesday. This action comes amidst heightened scrutiny over alleged violations of foreign exchange regulations by the fintech. However, Paytm has vehemently denied these accusations, terming them as “factually incorrect”.

This probe adds to the challenges faced by Paytm CEO Vijay Shekhar Sharma, following the Reserve Bank of India’s decision last month to prohibit PBBL from conducting credit transactions across the majority of its services.

This action effectively halted most of its operations, including its widely-used digital wallet, due to”persistent non-compliance”.Moreover, the nodal accounts of the parent company, One97 Communications Ltd., along with those of Paytm Payments Bank Ltd. (PBBL), have been terminated. Despite this development, customers retain the ability to utilize their account balances, including savings and current accounts, “without restriction and up to available limit,” as specified in the RBI order.

Since January 31, the value of Paytm’s stock has plummeted by more than 45%, resulting in an estimated loss of $ 2.6 billion in shareholders’ wealth. As of 1:30 pm, the stock was trading down by9.29% for the day, adding to the downward trend in its market performance.