RBI issues FEMA compounding order to Paytm; Rs 18.7 lakh penalty

One 97 Communications Limited, the parent company of Paytm, has received a compounding order from the Reserve Bank of India under the Foreign Exchange Management Act, in relation to foreign investment transactions involving its subsidiaries Little Internet Private Limited and Nearbuy India Private Limited.

In a regulatory filing under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company said it received the RBI order on February 2, 2026. The company said the order is for one of the compounding applications filed by it under FEMA.

RBI imposed a compounding fee of Rs 18.76 lakh for certain investments made in Little Internet Private Limited by Little Internet Singapore Pte Ltd. The filing states that the underlying transaction value was approximately Rs 33 crore and the transactions relate to the period March 2016 to June 2017. The contravention is stated as Regulation 5(1) read with Regulation 13 of FEMA Notification 120/RB-2004.

One 97 Communications said it is in the process of paying the compounding fee and after payment the matter will stand disposed. The company also said this has no material impact on its financials or operations. The company also mentions that during the quarter ended December 31, 2025, RBI compounded certain matters relating to “Nearby India Private Limited” for a fee of approximately Rs 4.28 lakh. Together, the two compounding fees total about Rs 23.04 lakh.

Earlier, the company disclosed on March 1, 2025 that it received a show cause notice dated February 27, 2025 from the Enforcement Directorate under FEMA. The notice relates to alleged contraventions for the years 2015 to 2019 and mentions an aggregate transaction amount of Rs 611,17,74,151.37.

The filing also listed a breakup of amounts attributed to One 97 Communications, Little Internet, and Nearbuy.

In the Q2 FY26 financial results note, the company stated that RBI compounded matters of aggregate value of about Rs 21 crore relating to Nearbuy India Private Limited. The same note states that RBI observed that matters of aggregate value of about Rs 312 crore relating to Little Internet were in compliance with applicable laws, based on the application and additional steps taken by Little Internet.

Operationally, Paytm reported a profit of Rs 225 crore and revenue of Rs 2,194 crore in Q3 FY26 for the quarter ended December 31, 2025.