The Supreme Court has affirmed the Karnataka High Court’s decision to quash money laundering proceedings initiated against fintech company Razorpay under the Prevention of Money Laundering Act (PMLA), offering major relief to the IPO-bound startup.
In its order dated February 26, the apex court stated that it was not “inclined to interfere with the impugned order(s) passed by the High Court.” The petitions filed by the Enforcement Directorate (ED) challenging the High Court’s ruling were dismissed, and any pending applications related to the matter were directed to be disposed of.
At the same time, the Supreme Court clarified that its ruling was confined to the specific facts of Razorpay’s case and should not be treated as a blanket precedent for other fintech entities.
Razorpay had been engaged in a prolonged legal dispute with the ED over allegations that it enabled transactions for a non-banking financial company (NBFC) linked to illegal loan applications. The ED had initiated proceedings against the payment gateway under Sections 3, 4 and 70 of the PMLA.
In March 2024, the Karnataka High Court set aside the ED’s case against Razorpay, observing that the company functioned merely as an intermediary and did not possess any intent to launder money. The High Court concluded that there was insufficient basis to proceed with money laundering charges against the fintech firm.
The Supreme Court’s decision comes at a critical juncture for Razorpay, which is preparing for a public listing estimated at $700 million. The company has already appointed investment bankers for the IPO, converted into a public limited company and completed its reverse flip to India ahead of the proposed listing.
With the ED’s appeal now dismissed, the legal uncertainty surrounding the PMLA proceedings has eased significantly for Razorpay as it moves toward the capital markets. However, the Supreme Court refrained from making broader observations on the applicability of the ruling to other payment aggregators or fintech intermediaries that may be facing similar proceedings under the PMLA framework.
Beyond the illegal loan app investigations, the ED has been actively pursuing money laundering cases involving startups in sectors such as real money gaming (RMG) and cryptocurrency, both of which continue to operate within evolving regulatory frameworks.
In a recent high-profile case, the agency initiated action against RMG platform WinZO, with its cofounders arrested under PMLA provisions last November. Authorities have since frozen or attached movable assets worth ₹689 crore, alleging that the company generated approximately ₹3,522.05 crore between FY22 and FY26 (up to August 22, 2025) through unlawful means.
The Supreme Court’s ruling in Razorpay’s case provides clarity for the company but also signals that scrutiny under anti-money laundering laws remains a significant compliance consideration for fintech players operating in India’s rapidly evolving digital financial ecosystem. change the headline
