RBI imposes compounding fee on Paytm over FEMA violations
04 Feb 2026, 10:06 AMThe penalty stems from Paytm's purchase of e-commerce firm Little Internet nearly eight years ago.
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The Reserve Bank of India (RBI) has imposed a compounding fee of Rs 18.76 lakh on fintech company Paytm over Foreign Exchange Management Act (FEMA) violations.
The penalty stems from Paytm's purchase of e-commerce firm Little Internet nearly eight years ago that involved investments totaling Rs 33 crore in the startup's holding companies.
Paytm disclosed in a stock exchange filing that it is currently processing the payment, after which the case will "stand disposed".
The RBI previously imposed a compounding fee of Rs 4.3 lakh related to Paytm's investment in Nearby India.
These Little Internet and Nearbuy transactions were carried out in 2016-17.
These settlements form part of a larger foreign exchange case that emerged last year when enforcement authorities issued a notice to Paytm over alleged violations worth Rs 611 crore.
Rather than face lengthy legal proceedings, Paytm opted for compounding, essentially paying penalties to resolve the matter administratively, which the RBI has discretion to approve.
The company has already settled portions of this case, with Rs 21 crore in Nearbuy-related issues resolved last quarter, while the RBI determined that roughly Rs 312 crore in Little Internet transactions actually complied with regulations.
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