Lax scrutiny by payment gateways to invite RBI ire
The agency is probing multi-crore gaming fraud involving Chinese companies
Lax due diligence by payment gateways like Paytm, Cashfree and Razorpay could invite the wrath of Reserve Bank of India ( RBI). Enforcement Directorate (ED), which is investigating the moneylaundering angle in the multi-crore gaming fraud involving Chinese companies, is said to be preparing a detailed report on the role of payment gateways that enabled Chinese companies to smoothly run their pan-India operations.
The ED’s report, which is likely to mention the role of HSBC bank in the online gaming fraud, will shortly be submitted to the RBI. It is learnt the Enforcement Directorate has come across hard evidence about payment gateways being lax in their functioning.
Highly placed sources told Deccan Chronicle that right at the initial stages of investigation, role of Paytm and Cashfree had surfaced in payments going to the Chinese companies run by Beijing T Power. As the probe deepened, ED summoned top executives of both these firms repeatedly to explain how transactions running into thousands of crores could go unchecked under their watch. In subsequent investigations, it emerged that one of the Chinese companies had parked Rs. 9 crore with another payment gateway Razorpay.
However, no individuals of these payment gateways have as yet been found to have assisted the accused Chinese companies. ED has found that locals were hired and used to open bank accounts with HSBC for payments through ` Paytm, Cashfree and Razorpay.
“Non-reporting of suspicious transactions to regulatory authorities has helped accused companies to run their operations smoothly,” ED officials maintain.
Analysis of two bank accounts belonging to M/s Dokypay Technology Private Limited revealed that they collected ` 1,268 crore in 2019, out of which 300 crore came via Paytm payment gateway and ` 600 crore was transferred out via the same Paytm gateway. Examination of M/s Linkyun Technology accounts revealed a similar pattern involving outward foreign remittances of ` 120 crore. There are suspicions that the network of companies indulged in banned activities like online betting as well as hawala transactions.
ED is presently questioning Chinese national Yan Hao and two other accused in the case.