The Enforcement Directorate (ED) has completed its inquiry into the transactions of Paytm Payments Bank Limited (PPBL) and has found no violation under the Foreign Exchange Management Act (FEMA). However, the Reserve Bank of India (RBI) has the authority to take action against certain non-compliance instances. The action was taken based on the Comprehensive System Audit report and a subsequent compliance validation report of the bank. The ED, which investigates offences under FEMA and the Prevention of Money Laundering Act (PMLA), ruled out money laundering investigation in this case due to the absence of PMLA scheduled offences. The agency examined over 50 lakh wallets/accounts and found no contravention of foreign exchange rules. The alleged violations mainly pertained to Know Your Customer (KYC) compliance and other issues, which fall under the purview of the RBI. The ED has reported its findings to the RBI, along with observations on other payment banks, third party application providers, and payment aggregators. The RBI may take appropriate action in this regard. The areas of concern identified by the agency include slackness in adherence to KYC norms, anti-money laundering measures, and regulatory compliance. The full adoption of Information Technology audit framework has also been recommended to prevent financial fraud. For more details, click on the Read More button.