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Paytm, the Indian digital payments giant, is set to reapply for a Payment Aggregator (PA) license from the Reserve Bank of India (RBI), a significant step towards expanding its payment services operations. This news follows Paytm’s subsidiary, Paytm Payments Services Limited (PPSL), receiving approval from the Ministry of Finance to invest further in its payment services business. This development allows PPSL to proceed with resubmitting its PA licence application to the RBI, a journey that began with an initial rejection in November 2022 due to non-compliance with Press Note 3.
Press Note 3 mandates prior government approval for investments originating from countries sharing land borders with India. This regulation was cited as the reason for the initial rejection of Paytm’s PA license application. Paytm, however, has remained steadfast in its commitment to securing the license, and this latest approval from the Ministry of Finance signifies a key milestone in their journey. Despite the setback, PPSL has continued to provide online payment aggregation services to its existing partners.
The RBI’s decision to reject Paytm’s initial application was based on its non-compliance with foreign direct investment (FDI) norms outlined in Press Note 3. Paytm was directed to meet the requirements before reapplying for the PA licence. This process highlights the importance of adhering to regulatory guidelines within the financial services sector. The RBI’s stance underscores the emphasis on ensuring compliance with FDI norms and safeguarding the integrity of India’s financial system.
Source: Paytm to reapply for RBI's payment aggregator licence post govt approval