Delhi High court issues ₹96 Lakh FIU penalty on PayPal

The Delhi High Court recently issued a penalty against PayPal by the Finance Ministry’s Financial Intelligence Unit (FIU), over non-compliance with norms laid out in the Prevention of Money Laundering Act, 2002 (PMLA).

PayPal filed a case with the Delhi High Court challenging the FIU penalty earlier this year. While the court has stayed the penalty, subject to PayPal providing a bank guarantee, it has asked the RBI and the Ministry of Finance to clarify its stance on companies like PayPal’s reporting to the FIU.

The order filled by the FIU said “There is ample evidence of the wilful violation of the law and, therefore, PayPal cannot be let off with a penalty that should normally be imposed for minor violations.” PayPal was directed to pay the fine within 45 days & register itself as a reporting entity with the FIU, as well as appoint a principal officer and director for communication within a fortnight of the receipt of the order.

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