Amid the ongoing crisis post the RBI ban, Paytm Money, One97 Communications’ trading platform, has come under the spotlight for KYC compliance. According to a report by the Economic Times, the Central Depository Services India Limited is looking into the verification process of the customers registered on the platform.
A Business Standard report said that the KYC compliance on trading platforms such as Paytm Money is far more stringent. The CDSL India is responsible for settlement proceedings as well as regulatory audits of trading platforms such as Paytm Money in the country. The focus on KYC compliance is to know if a trading platform is following the anti-money laundering regulations or not, the Business Standard report added. It further said that the norms regarding KYC are far more stringent for the trading platforms.
Meanwhile, according to a report by The Mint, Paytm Money has termed the CDSL scrutiny as a regular audit. Paytm Money says that rather than scrutiny linked to RBI ban, this is more of a ‘routine exercise,’ the Mint report added.
Meanwhile, earlier in the day, the RBI come down heavily on Paytm and said that despite several nudges, Paytm Payments Bank’s ‘persistent’ non-compliance led to the January 31 action. The central bank also said that there are no systemic worries and that this issue pertains only to one corporate entity.
In a related development, the shares of One97 Communications Ltd, the parent company of the Paytm brand, experienced a 10 per cent decline, hitting the lower circuit limit, following a two-day rally in the stock that lost momentum. Despite a strong start, the stock plummeted by 9.99 per cent to Rs 447.10 on the BSE and by the same percentage to Rs 446.65 on the NSE, reaching its lowest trading limit for the day. Consequently, the company’s market valuation decreased by Rs 3,153.18 crore, totaling Rs 28,394.44 crore.