Reserve Bank of India (RBI) Imposes ₹18.76 Lakh Compounding Fee on Paytm

Key facts

• The Reserve Bank of India (RBI) has issued a compounding order to One 97 Communications (Paytm) for contraventions under the Foreign Exchange Management Act (FEMA).
• The RBI imposed a compounding fee of ₹18.76 lakh regarding investments made in Little Internet Private Limited by Little Internet Singapore.
• The underlying transactions involved an aggregate value of approximately ₹33 crore and pertained to the period between March 2016 and June 2017.
• The Directorate of Enforcement (ED) terminated FEMA proceedings against Nearbuy India on 19 December after the company paid a penalty of ₹4.28 lakh following an RBI compounding order.
• Paytm had previously received a show cause notice from the ED for alleged FEMA violations involving transactions worth ₹611 crore linked to the company and its subsidiaries.
• The parent firm of Paytm was allegedly involved in transactions worth ₹245 crore, while Little Internet and Nearbuy India were linked to contraventions involving ₹345 crore and ₹20.9 crore, respectively.
• Paytm acquired the hyperlocal discovery and deals platforms Little Internet and Nearbuy in 2017 and subsequently merged the two brands.