Policy · Financial Services

Paytm pays RBI penalty for past FEMA breaches

By Startup Enthusiast · 3 February 2026

What they do

Paytm offers digital payments, banking, and insurance services to consumers and businesses

The company paid a ₹23.1L compounding order from the RBI for foreign exchange law violations in 2016-2017

This fine comes as Paytm reports strong Q3 profits and continues regulatory cleanup with other authorities

The Reserve Bank of India issued a compounding order on February 2, 2026, against Paytm.
Paytm must pay a total penalty of ₹23.1L for breaching foreign exchange regulations.
The breach relates to the acquisition of Little Internet between March 2016 and June 2017.
A separate penalty of ₹4.3L was imposed for investments in Nearby India.
The Enforcement Directorate issued a show cause notice in March 2025 regarding larger contraventions.
The ED alleged total contraventions worth ₹611.17 Cr involving Paytm and its subsidiaries.
Prior to this, Paytm settled matters worth ₹21 Cr related to Nearbuy in Q2 FY26.
The RBI observed that Little Internet transactions worth ₹312 Cr were compliant with laws.

Compounding allows companies to settle violations by paying a fee without admitting guilt.
This action is part of a broader regulatory cleanup involving SEBI and tax authorities.
Founder Vijay Shekhar Sharma has been involved in settling multiple past cases over the last year.

Paytm operates a digital payments platform for consumers and merchants across India.
The company provides financial services including insurance, mutual funds, and lending products.
It generates revenue through transaction fees, interest income, and merchant commissions.
Paytm reported an operating revenue of ₹2,194 Cr in Q3 FY26.
Net profit reached ₹225 Cr, marking a ten-fold increase from the previous quarter.
The company's share price rose 2.31% to ₹1197.15 on the BSE.
Paytm faces ongoing compliance requirements due to its status as a regulated payment entity.
The business includes subsidiaries like One97 Communications and Little Internet entities.

Paytm continues to address remaining regulatory obligations with various government bodies.
The company focuses on maintaining compliance while growing its financial services portfolio.