Paytm Payments Services Ltd (PPSL), a wholly owned subsidiary of One 97 Communications Ltd, has received in-principle authorisation from the Reserve Bank of India (RBI) to set up and operate a payment system for issuing and operating prepaid payment instruments (PPIs), including prepaid wallets, in India. The authorisation does not permit the company to launch wallet services immediately.
According to a disclosure by One 97 Communications to the stock exchanges, PPSL must first comply with the RBI’s Master Directions on Prepaid Payment Instruments dated August 27, 2021, as amended from time to time. The company said it will be able to offer PPIs and wallets to customers only after receiving the central bank’s final authorisation, or Certificate of Authorisation (CoA).
The in-principle approval follows PPSL’s application for a wallet licence, which the company had referred to in its Q1 FY2027 earnings release. The latest authorisation is therefore an intermediate regulatory step rather than an immediate return of Paytm’s wallet services.
The approval has been granted to PPSL, a separate wholly owned subsidiary of One 97 Communications, and not to Paytm Payments Bank Ltd (PPBL). The distinction is significant because the RBI cancelled PPBL’s banking licence on April 24, 2026, under Section 22(4) of the Banking Regulation Act, 1949.
The central bank prohibited PPBL from conducting banking business from the close of business on April 24 and said it would apply to the High Court for winding up the bank. In its April 24 press release, the RBI said the bank’s affairs were being conducted in a manner detrimental to the interests of the bank and its depositors and cited failure to comply with conditions attached to its payments bank licence.
The RBI had earlier imposed restrictions on PPBL in January and February 2024. These included prohibiting further deposits, credits and top-ups in existing customer accounts, prepaid instruments and wallets. The bank had also been stopped from onboarding new customers from March 11, 2022.
The new in-principle authorisation does not alter those earlier actions against PPBL. Any future prepaid wallet service would be operated through PPSL and would remain subject to the RBI’s final authorisation and the applicable PPI regulations. The company has not received that final authorisation as of its latest disclosure.
