Summary: One97 Communications (OCL), the parent company of Paytm, has received a show cause notice from the Enforcement Directorate (ED) over alleged violations of foreign exchange rules under FEMA, amounting to Rs 611 crore. The notice, dated February 27, highlights non-compliance at OCL (Rs 245 crore), Little Internet (Rs 345 crore), and Nearbuy India (Rs 20.9 crore). Paytm had acquired and merged the two hyperlocal deals platforms—Little Internet and Nearbuy—in 2017. The company is reviewing the notice and has assured that its ongoing operations remain unaffected.
One97 Communications Ltd (OCL), the parent company of leading digital payments platform Paytm, has received a show cause notice from the Enforcement Directorate (ED) over alleged violations of foreign exchange regulations involving a cumulative amount of Rs 611 crore.
The company, in a regulatory filing, stated that the notice, dated February 27, pertains to alleged contraventions under the Foreign Exchange Management Act (FEMA).
According to the ED, the non-compliance involves three entities: OCL itself, where violations amounting to Rs 245 crore have been cited, along with its two subsidiaries—Little Internet, with alleged violations worth Rs 345 crore, and Nearbuy India, with Rs 20.9 crore in question.
Both Little Internet and Nearbuy India were hyperlocal deals platforms that Paytm acquired in 2017. The two brands were subsequently merged, expanding Paytm’s footprint in the deals and offers space at the time.
The company said it is currently reviewing the notice and will respond as per the applicable legal process.
This development adds to the growing regulatory scrutiny around Paytm, which has already been grappling with challenges following the Reserve Bank of India’s (RBI) crackdown on its payments bank entity.
OCL reiterated that the show cause notice does not impact its existing business operations and that it remains committed to full regulatory compliance.
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