Paytm Receives Administrative Warning from SEBI Over Transactions with Payments Bank 

One 97 Communications, the parent company of Paytm, has received an administrative warning letter from market regulator SEBI. 

The letter pertains to related-party transactions between the company and Paytm Payments Bank for FY22. The SEBI mentions that these transactions were not approved by the audit committee or shareholders, as per several media reports. 

In response to the warning, the fintech firm mentioned in a regulatory filing, “The Company believes it has consistently acted in compliance with Regulation 23 read with Regulation 4(1)(h) of the SEBI Listing Regulations, including any amendments and updates to these regulations over time.” 

The fintech firm has added that the company is committed to upholding and demonstrating the highest compliance standards and shall also submit its response to SEBI. 

The fintech firm has also highlighted that this move will not have any effect on the financial operations or other activities of the company. In the SEBI letter uploaded by One 97 Communications on its exchange, it is said that while the company provided a cumulative value of these transactions for shareholder reference, they argued that transactions between its subsidiaries and PPBL did not qualify as related party transactions. 

The transaction is valued at Rs 324 and Rs 36 crore. In the letter, the market regulator mentioned, “The above violations have been viewed very seriously. You are, therefore, warned to be careful in the future and improve your compliance standards to avoid the recurrence of such instances in the future, failing which appropriate enforcement action would be initiated in accordance with the law.” 

The fintech platform has been advised by the market regulator to place the SEBI warning in front of its board of directors at their next meeting for their information. Following this, an action taken report must be submitted to the SEBI within 10 days, according to the regulator.