Paytm Faces ED Scrutiny Over FEMA Violations

Following reports of the Enforcement Directorate (ED) issuing a notice to Paytm, shares of One97 Communications experienced a significant drop before making a recovery. The notice pertains to alleged violations of FEMA rules by Paytm and its subsidiaries, Little Internet and Nearbuy, concerning specific investment transactions.

Paytm has clarified that the alleged violations occurred during a period when these companies were not under its subsidiary umbrella. The company received the notice on February 28, 2025, relating to transactions from 2015 to 2019, involving amounts over Rs 611 crore.

Details of the Alleged Violations

The regulatory filing by One97 Communications detailed the alleged violations, which include transactions by OCL of over Rs 245 crore, LIPL's approximately Rs 345 crore, and NIPL's about Rs 21 crore. Paytm emphasized that the alleged contraventions by Little Internet Pvt Ltd and NearBuy India Pvt Ltd pertain to a time when these entities were not subsidiaries of the company.

Paytm's Response and Next Steps

Paytm has assured its users and stakeholders that it is addressing the situation legally, with services remaining unaffected and fully operational. The company is seeking legal advice and evaluating appropriate remedies to resolve the matter in accordance with applicable laws and regulatory processes.