PayPal joins FIU in compliance with anti-money laundering regulations
- ByStartupStory | February 21, 2024
US-based online payments gateway PayPal has completed registration with India’s Financial Intelligence Unit (FIU) under Anti-Money Laundering laws. The formal procedure solidifies PayPal’s status as a reporting entity under the Prevention of Money Laundering Act (PMLA), with all necessary documents submitted to the FIU. PayPal is expected to appoint a director to comply with Anti-Money Laundering (AML) directives, having already designated a principal officer.
“The registration marks PayPal’s commitment to comply with India’s Anti-Money Laundering regulations,” stated a spokesperson for PayPal.
The FIU, responsible for overseeing suspicious financial transactions in India, receives information from various sources to share with enforcement agencies and other entities. PayPal’s registration aligns with the Reserve Bank of India’s regulatory framework governing cross-border payment aggregators (PA-CB), ensuring customer protection and regulatory compliance in the industry.
“After a protracted legal conflict, PayPal and FIU have resolved their differences,” said a representative from PayPal.
In the past, PayPal faced penalties for non-compliance with PMLA regulations, with the Delhi High Court dismissing the FIU’s penalty in July 2023. However, PayPal was directed to fulfill reporting obligations under the PMLA, prompting its registration with the FIU in December 2023.
“The registration with FIU-IND under PA-CB Circular No.RBI/2023-24/80 demonstrates PayPal’s commitment to regulatory compliance,” added the PayPal spokesperson.
By registering with the FIU, PayPal aims to share suspicious transaction reports to prevent illicit financial activities, strengthening India’s financial system.
“Non-compliance posed risks to India’s financial system,” highlighted FIU officials.
PayPal referred to RBI guidelines in its operations as an Online Payment Gateway Service Provider (OPGSP) and emphasized its commitment to reporting suspicious transactions globally.
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