The Securities and Exchange Board of India (SEBI) issued a warning letter to the parent company of Paytm, One 97 Communications, on certain transactions between Paytm and the now-defunct Paytm Payments Bank were allegedly carried out without the approval of the company's audit committee or shareholders in FY22.

Paytm responded that it has always complied with all listing criteria and promised to address all of the regulator's issues in detail.

The notice talks about Rs.36 crore and Rs.324 crore related party transactions.

SEBI denotes that the permit for these transactions, which occurred in FY 2021–2022, was not given by the audit committee or the shareholders.

It highlighted the discrepancies between the transactions that the Board and Audit Committee had categorized as significant related party transactions and the company's assertions of compliance.

On the other hand, Paytm showed that it stays complied with Regulation 23 of the SEBI Listing Regulations, as well as Regulation 4(1)(h).

The SEBI stated, “The above violations have been viewed very seriously,” and went on to say that to stop this kind of thing from happening in the future, compliance standards needed to be improved. SEBI further stated that if this is not done, the relevant legal enforcement action may be taken.

“The Company considers that it has continuously complied with Regulation 23 in conjunction with Regulation 4(1)(h) of the SEBI Listing Regulations, taking into account any modifications and updates made to these rules over time. The business will reply to SEBI and is dedicated to maintaining and proving the highest compliance standards. According to the aforementioned letter, there is no effect on the company’s financial, operational, or other activities “Paytm stated.

Now, Paytm is asked to submit a report on the actions taken and send the letter to its board.

The fintech major gave its word that this warning would not affect its business operations, finances, or other company operations.

With that, it is currently looking at ways to ease SEBI's concerns and enhance compliance protocols in order to prevent future occurrences of the same issues.

“Paytm remains dedicated to maintaining transparency and integrity in all its operations, ensuring adherence to regulatory requirements and the highest standards of corporate governance,” said the company.

Paytm has reiterated its dedication to addressing SEBI's concerns in full and maintaining open channels of engagement with the regulatory body.