Our Bureau
Mumbai
Paytm’s wholly owned subsidiary, Paytm Payments Services Ltd (PPSL), has received in-principle authorisation from the Reserve Bank of India (RBI) to issue and operate prepaid payment instruments (PPIs), including digital wallets, marking a significant step towards reviving its wallet business.
The approval, granted on November 13, allows PPSL to set up and operate a payment system for prepaid instruments in India. However, the company will have to secure the RBI’s final authorisation before it can begin offering wallet services to customers.
The development triggered a positive response in the stock market, with shares of Paytm’s parent company, One 97 Communications, touching a record high of Rs 1,960 during Friday’s trading session. The stock has gained nearly 50 per cent so far this year, reflecting improved investor sentiment towards the fintech company’s business prospects.
The RBI’s preliminary approval is subject to compliance with its Master Directions on Prepaid Payment Instruments. PPSL is also required to complete a system audit, including a cybersecurity audit, and submit the report to the central bank within six months. Failure to meet the deadline could result in the in-principle authorisation lapsing.
The approval comes after a prolonged period of regulatory challenges for Paytm. In 2024, the RBI restricted Paytm Payments Bank from accepting fresh deposits and allowing wallet top-ups, citing persistent regulatory non-compliance and supervisory concerns. These restrictions disrupted the company’s regular wallet operations.
Earlier in April 2026, the RBI cancelled the banking licence of Paytm Payments Bank, leading to its winding up.
The latest authorisation has been granted to PPSL, a separate subsidiary of One 97 Communications, allowing Paytm to pursue its wallet business independently of the payments bank. The move could also open up opportunities in prepaid cards and strengthen its digital payments offerings.