India's central bank has granted Paytm's payments arm an in-principle authorization to establish and run a system for prepaid payment instruments (PPIs), including wallets; the company still needs final authorization before offering them.
The Reserve Bank of India (RBI) issued the letter to Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications, on Nov. 13. The authorization is under the Payment and Settlement Systems Act, 2007, and subject to the RBI's Master Directions on PPIs, dated Aug. 27, 2021, as updated. It covers setting up and operating the payment system, rather than immediate issuance to customers.
One 97's filing says PPSL may offer PPIs only after it receives final authorization, described as a Certificate of Authorisation. The RBI's letter also requires a system-audit report that addresses cybersecurity. PPSL has six months from Nov. 13 to submit that report; the letter does not set a date for the final decision.
Business Standard's price page showed One 97 shares reaching ₹1,960 on the National Stock Exchange of India on Friday, a 52-week high. The shares closed at ₹1,939.90, up 0.77% from the previous close of ₹1,925.
The authorization applies to PPSL, not to Paytm Payments Bank or its banking licence. In 2024, the RBI said an external audit and later compliance validation found persistent non-compliances and supervisory concerns at the bank. It barred the bank from accepting further deposits, credits and top-ups after March 15, 2024.
The RBI cancelled Paytm Payments Bank's licence effective at the close of business April 24, 2026, saying the bank's affairs had harmed the interests of the bank and its depositors. It said it would apply to the High Court to wind up the bank. PPSL still needs final RBI authorization before it can offer PPIs.
