Paytm has received preliminary approval from the Reserve Bank of India to issue prepaid payment products, including digital wallets, moving the company closer to restarting a service that was halted after regulatory action against Paytm Payments Bank.
Paytm Payments Services, a wholly owned subsidiary of the company, will be able to offer prepaid payment instruments to customers only after receiving the RBI’s final authorisation, according to a company filing reported by Reuters. The preliminary approval does not by itself permit the immediate resumption of wallet services.
The announcement sent Paytm shares to a record high of Rs 1,960 on Friday. The market response reflects the importance of wallet operations to Paytm’s payments business, although the final regulatory clearance remains pending.
The RBI had earlier barred Paytm Payments Bank from accepting fresh deposits and wallet top-ups after citing persistent regulatory non-compliance and supervisory concerns. The action effectively halted the bank’s normal wallet operations and disrupted the structure through which Paytm had provided several payments-related services.
The latest approval is directed at Paytm Payments Services rather than Paytm Payments Bank. That distinction is significant because the banking licence issued to Paytm Payments Bank was cancelled by the RBI earlier this year, according to the report. Paytm is therefore seeking to rebuild its wallet offering through a separate payments services entity and under a fresh regulatory authorisation.
Prepaid payment instruments allow customers to store and use funds for transactions without relying on a conventional bank account for every payment. Digital wallets have been used for online purchases, bill payments and other everyday transactions, making regulatory approvals for such services part of the wider operating framework for India’s digital payments infrastructure.
The episode also shows how regulatory compliance can reshape the architecture of a large consumer payments platform. Paytm’s earlier wallet operations were tied to Paytm Payments Bank, while the proposed restart would place the service under Paytm Payments Services, subject to the RBI’s final decision and applicable conditions.
For customers, the preliminary approval signals a possible return of wallet functionality but does not establish when services will resume or what products will be available. The company’s filing, as reported by Reuters, did not indicate a date for final authorisation or the relaunch of wallets.
Paytm’s next formal milestone is the RBI’s final authorisation. Until that approval is granted, the company’s payments services unit cannot offer the prepaid products covered by the preliminary clearance.
