The Enforcement Directorate (ED) on 19th December, 2025, announced the termination of Foreign Exchange Management Act (FEMA) violation proceedings against Nearbuy India Private Limited, a subsidiary of Paytm. This resolution followed a compounding order issued by the Reserve Bank of India (RBI), which settled the matter after Nearbuy paid a penalty of ₹4.28 crore.
The case involved allegations of delays in reporting foreign inward remittances and share issuances, and its closure marks a partial relief for Paytm amid ongoing regulatory scrutiny. A statement issued by ED said, “The Reserve Bank of India (RBI) has issued a compounding order on 17.10.2025 u/s 15 of Foreign Exchange Management Act, 1999 (FEMA), in the case of Nearbuy India Private Limited which has resulted into termination of proceedings against the company for alleged contraventions of provisions of FEMA, 1999. The said order has been passed by RBI after issuance of “No Objection” by the Directorate of Enforcement (ED).”
The FEMA proceedings against Nearbuy stemmed from a show-cause notice issued by the ED in March 2025 to Paytm’s parent company One97 Communications, alleging violations totalling ₹611 crore across multiple subsidiaries. The charges against Nearbuy included delays in reporting inward remittances amounting to ₹ 35.82 crore, and late filing of forms related to the issuance of shares worth ₹73.01 crore.
These contraventions violated FEMA regulations, which require timely reporting of foreign exchange transactions to ensure transparency and compliance with India’s foreign investment norms. The ED’s investigation highlighted procedural lapses, but no evidence of intentional fraud or money laundering was indicated in the public announcements. As per provisions of FEMA, the adjudication proceedings were initiated by the Adjudicating Authority, and show cause notices were issued to the company officials.
The company then filed an application before the RBI for compounding of the violations under FEMA as per the provisions of Section 15 of the Act. On reference from RBI, the ED issued no objection for such compounding.
Accordingly, on the basis of no objection issued by ED, RBI issued an order on 17 October compounding the contraventions with a one-time payment of ₹4,28,297.00. As a result of this settlement, the adjudication proceedings against the company and its office bearers have been terminated.
Notably, a compounding order is an administrative mechanism to resolve regulatory violations without resorting to formal prosecution or court trials. It operates as a voluntary settlement process where the entity admits to the contravention, submits an application for compounding, and pays a prescribed penalty
Compounding is governed under Section 15 of FEMA and the Foreign Exchange (Compounding Proceedings) Rules, 2000, and it enables handling of non-serious violations quickly.
Nearbuy India Private Limited operates as a deals and discovery platform, focusing on local offers for dining, entertainment, and services. It became a subsidiary of Paytm in 2017 through an acquisition deal where Paytm’s parent company, One97 Communications Limited, merged Nearbuy with Little Internet Private Limited. This integration allowed Paytm to expand its ecosystem by gaining a majority stake in the combined entity, enhancing its offerings in hyperlocal deals and e-commerce.
This termination provides partial resolution for Paytm, which has faced intensified regulatory oversight in recent years, including issues related to its payments bank and other subsidiaries.