“We will apply for the payment aggregator licence to the RBI in due course,” Sharma said, reiterating Paytm’s ongoing efforts to expand its payment services operations.
The announcement comes shortly after Paytm Payments Services Limited (PPSL), a subsidiary of Paytm, secured approval from the Ministry of Finance to invest further in its payment services business. In a filing, Paytm confirmed, “PPSL has received approval from the Government of India, Ministry of Finance, Department of Financial Services, via its letter dated August 27, 2024, for downstream investment from the company into PPSL.”
This approval allows PPSL to move ahead with resubmitting its PA licence application to the RBI. Despite the rejection of its initial PA licence application in November 2022 due to non-compliance with Press Note 3, the company has remained committed to the process. Press Note 3 requires prior approval from the government for investments originating from countries that share land borders with India.
While Paytm awaits the opportunity to reapply for the PA licence, PPSL will continue providing online payment aggregation services to its existing partners. “With this approval in place, PPSL will proceed to resubmit its PA application. In the meantime, PPSL will continue to provide online payment aggregation services to existing partners,” the company said in a statement.
The RBI had previously rejected Paytm’s application for a PA licence, citing non-compliance with foreign direct investment (FDI) norms outlined in Press Note 3. The RBI had also instructed Paytm to meet the requirements before reapplying.
One 97 Communications, the parent company of Paytm, has faced regulatory scrutiny over the last few years. In January, the RBI ordered Paytm Payments Bank to halt its onboarding of new customers, raising concerns over its compliance with banking regulations. The company has also been under the lens of India’s financial crime-fighting agency.
[With agency inputs]
First Published: Sep 12 2024 | 12:57 PM IST