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India’s leading digital payments and financial services provider, Paytm, has addressed concerns regarding an alleged violation of the Foreign Exchange Management Act (FEMA) linked to two of its acquired subsidiaries—Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL). The company clarified that the alleged contraventions primarily relate to transactions before its investment in these entities.
Show Cause Notice from Enforcement Directorate (ED)
On February 28, 2025, Paytm’s parent company, One97 Communications Limited (OCL), along with certain Directors and Officers, received a Show Cause Notice (SCN) from the Directorate of Enforcement (ED) regarding alleged FEMA non-compliances between 2015 and 2019. These allegations are linked to investments in LIPL and NIPL before they became part of Paytm.
Paytm’s Response and Legal Action
Paytm has stated that most of the alleged violations occurred before the company acquired these subsidiaries.
The company is seeking legal advice and evaluating regulatory remedies to resolve the matter.
No impact on business operations—Paytm reassured users that all services on the Paytm app remain fully operational and secure.
Business as Usual: No Disruptions for Users and Merchants
Amid these regulatory concerns, Paytm has assured its millions of users and merchant partners that it remains committed to providing uninterrupted financial services.
Official Statement:
"All services on the Paytm app are fully operational and secure."
The company further emphasized its focus on compliance with regulatory guidelines and strengthening its core payments and financial services business.
Paytm Continues to Strengthen Its Digital Payments Ecosystem
Despite regulatory scrutiny, Paytm remains a dominant player in India’s digital payments sector. The company is actively working towards resolving the FEMA-related concerns and ensuring that its services remain unaffected.
With consistent business enhancements and a focus on core financial services, Paytm continues to reinforce its position as a trusted digital payments provider for users and merchants across India.
