Paytm receives show cause notice for violating FEMA in acquisition of two subsidiaries; to seek resolution of allegation | Company Business News

Paytm received a show cause notice from India’s financial crime fighting agency on Saturday for allegedly violating the country’s Foreign Exchange Management Act. The notice relates to violations relating to acquisition of two subsidiaries – Little Internet Private Limited and Nearbuy India Private Limited for the years 2015 to 2019, the company said in a statement.

The notice has no impact on its services to its consumers and merchants, Paytm added.

The company in an exchange filing clarified that certain alleged contraventions are attributable to these subsidiaries for transactions during a period before they became part of Paytm.The allegations stem from a show cause notice (SCN) received by Paytm from the Directorate of Enforcement (ED) on February 28, 2025, related to alleged violations under the Foreign Exchange Management Act, 1999 (FEMA) for transactions between 2015 and 2019, the filing added. Paytm stated that it is seeking legal advice and evaluating appropriate remedies through available regulatory processes.

“To resolve the matter in accordance with applicable laws and regulatory processes, the Company is seeking necessary legal advice and evaluating appropriate remedies,” the filing adds.

Paytm highlighted that a portion of the alleged contraventions pertains to a period prior to its investment in Little and Nearbuy, reinforcing that these transactions occurred before the companies became its subsidiaries.

The company, in the filing, reaffirmed that the matter does not affect its operations. All services on the Paytm app remain fully operational and secure, with no impact on users or merchants.

“Paytm upholds principles of transparency, governance, and compliance in all its business practices. This matter is being addressed with a focus on resolving it in accordance with applicable laws. There is no impact of this matter on Paytm’s services to its consumers and merchants, and all services are fully operational and secure, as always,” the filing adds. 

Paytm reiterated its commitment to transparency, governance, and regulatory compliance, the company added in the filing. The company further added that it is addressing the matter with a focus on resolving it in line with applicable laws, while continuing to serve its millions of users and merchant partners.