Paytm Money settles technical violation case with Sebi for Rs 45.5 lakh

Paytm Money, the fintech arm of One97 Communications, has resolved a case with market regulator Securities and Exchange Board of India (Sebi) by paying a settlement amount of Rs 45.50 lakh, according to a report by news agency PTI. 

 

The case stemmed from alleged violations of Sebi’s technical glitch framework, outlined in a circular dated November 25, 2022.

 

The settlement was finalised after Paytm Money filed an application in September last year, seeking to resolve the proceedings without admitting or denying the facts and conclusions of the alleged violations. 

 

Sebi’s adjudicating officer, Asha Shetty, confirmed the settlement in an order issued on Thursday, stating that the adjudication proceedings against the company were disposed of in line with settlement regulations, PTI reports.

 

 

Sebi’s investigation into Paytm Money

 

The Sebi probe followed an investigation into Paytm Money’s compliance with technical norms, including the timely generation of alerts for critical assets. The regulator’s show-cause notice (SCN) issued on July 24, 2024, accused the company of failing to maintain a permissible 70 per cent limit for alert generation. 

 

Sebi also raised concerns over Paytm Money’s lack of documentary evidence related to peak load observations, failure to connect all critical systems to a log analytics application, and the absence of a live disaster recovery drill for the period from April to September 2023.

 

Following the receipt of the settlement application, Paytm Money revised its settlement terms, which were approved by Sebi’s high-powered advisory committee. With the payment of the settlement fee, the case has now been officially resolved.

 

Paytm appoints Rajeev Agarwal

 

In another development, One97 Communications, announced on Thursday the appointment of Rajeev Krishnamuralilal Agarwal as an additional non-executive independent director at its wholly-owned subsidiary, Paytm Money. 

 

Agarwal will also take on key roles, including serving as a member of the Audit Committee and chairing the Risk Management and Corporate Social Responsibility (CSR) Committees at Paytm Money.

 

Agarwal brings over 40 years of experience to the role, having spent 28 years with the Indian Revenue Services (IRS). His career includes serving as a whole-time member of the Securities and Exchange Board of India (Sebi).

 

In addition to his new responsibilities at Paytm Money, Agarwal is a board member of One97 Communications. He also holds roles as Chairman and Independent Director at Trust Mutual Fund and serves as Independent Director at ACC Ltd, Star Health Insurance, UGRO Capital Ltd, and MK Ventures Capital Ltd.

 

[With inputs from PTI]