Paytm Clarifies Alleged FEMA Breaches from Acquired Subsidiaries

Paytm has received a show cause notice from the Enforcement Directorate over alleged FEMA violations by its subsidiaries, Little Internet and Nearbuy. These alleged contraventions relate to transactions done before they joined Paytm. The company aims to resolve this issue without affecting its operational services.

Paytm, a prominent digital payments and financial services firm, announced it is seeking a resolution for alleged FEMA violations tied to its subsidiaries, Little Internet Private Limited and Nearbuy India Private Limited. These purported contraventions are linked to transactions conducted before these companies became part of Paytm.

The allegations originate from a show cause notice delivered by the Directorate of Enforcement to Paytm on February 28, 2025, concerning alleged breaches under the Foreign Exchange Management Act from 2015 to 2019. Paytm clarified in a statement that it is pursuing legal guidance and examining suitable remedies through regulatory channels.

Despite the ongoing issue, Paytm emphasized in its filing that it won't disrupt its operations. The company reassured all users and merchants that its services remain fully functional and secure. Paytm reiterated its dedication to transparency, governance, and compliance, asserting that addressing the matter under applicable laws is a priority.

(With inputs from agencies.)