The article notes that following investigations into other tech and fintech companies like Byju’s and Razorpay, the Enforcement Directorate has put Paytm under inquiry for potential violations of FEMA regulations. This development raises concerns about Paytm’s compliance with financial and regulatory norms.

Paytm management was summoned by the Bengaluru Labour Commissioner following complaints of forced terminations and alleged violation of labour laws during the company's restructuring process.

Multiple Paytm employees have filed complaints with the Ministry of Labour alleging unfair termination practices, forced resignations without proper notice or compensation, and abrupt layoffs amid the company's restructuring and cost-cutting measures, as reported by Moneycontrol and supported by the All India Professionals' Congress (AIPC).

Paytm's Rs 50 crore investment in its payments arm has been put on hold by the government due to concerns over Chinese ownership in its parent company. The move, prompted by a rejection from the foreign ministry on political grounds, raises regulatory and structural issues for the company.

Paytm faces severe regulatory hurdles after accusations of financial impropriety by the RBI, leading to suspension of new deposits and impacting small businesses. The crisis highlights longstanding issues in corporate governance and regulatory compliance dating back to 2018.

Following the RBI directive that imposed restrictions on its payments bank arm, Paytm has unveiled a strategic roadmap focused on streamlining compliance, strengthening core payments, and diversifying its service portfolio. The company aims to mitigate operational disruptions, retain merchant and user trust, and secure a sustainable future in a challenging regulatory environment.

On January 31, 2024, the Reserve Bank of India barred Paytm Payments Bank from accepting new deposits and providing core banking services, citing multiple regulatory violations including inadequate KYC practices, misuse of nodal accounts, and provision of services beyond its permitted scope. This regulatory action has exposed significant ethical lapses in business practices and has adversely affected market confidence in Paytm.