The Reserve Bank of India (RBI) has slapped a compounding order worth INR 18.8 Lakh on fintech major Paytm pertaining to alleged Foreign Exchange Management Act (FEMA) breach. In a filing with the exchanges, the company informed that it is in the process of making the payment for the compounding fee, pursuant to which the matter will be disposed off. The penalty pertains to Paytm’s acquisition of ecommerce startup Little Internet, which was completed between March 2016 to June 2017. The transaction saw Paytm invest in the startup’s two holding entities — Little Internet Singapore Pte Ltd and Little Internet Pvt Ltd. The total value of the underlying transaction was INR 33 Cr. Besides the aforementioned, the RBI had issued a separate compounding order worth INR 4.3 Lakh to Paytm for its investment in Nearby India. The company disclosed this while sharing its financial update for the December quarter earlier last week. Both of the orders, which cumulatively imply a penalty of INR 23.1 Lakh, relates to the 2017 acquisition of Nearbuy and Little by Paytm to boost their online-to-offline (O2O) and hyperlocal services. These settlements are part of a broader FEMA case that the company has been dealing with… Read MoreInc42 Media
