Paytm, India’s leading digital payments and financial services company, has received a show cause notice from the Directorate of Enforcement related to alleged contraventions of the Foreign Exchange Management Act, 1999 (FEMA) for transactions associated with its acquired subsidiaries — Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).
According to the company’s stock exchange filing, the alleged contraventions pertain to transactions between 2015 and 2019 — a period that was partly before Paytm’s acquisition of the two subsidiaries. It further clarified that certain alleged contraventions are attributable to the acquired subsidiaries before they became part of Paytm.
To resolve the issue, the company is seeking legal advice and intends to take appropriate remedies through available regulatory processes, in line with applicable laws.
Paytm reaffirmed that there is no financial implication at this stage and the matter does not affect its day-to-day business. “All services on the Paytm app remain fully operational and secure, as always,” the company said in its filing.
The company added that it upholds principles of transparency, governance, and compliance in all its business practices and remains committed to serving its users and merchant partners.
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