Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications, has received in-principle authorization from the Reserve Bank of India (RBI) to issue and operate prepaid payment instruments in the country. This development marks a significant shift for the company, as it aims to revive its digital wallet business nearly three years after regulatory measures disrupted its original payment offerings.
According to a stock exchange filing made by the parent company on Friday, the approval was granted under the Payment and Settlement Systems Act, 2007. The authorization is subject to the company strictly adhering to the RBI’s Master Directions on Prepaid Payment Instruments, which were last updated in August 2021. The Indian Express reported that following the announcement, the fintech firm’s shares reached a record high of Rs 1,960.
To move from this preliminary stage to obtaining the final Certificate of Authorisation, Paytm must now complete a mandatory systems audit. This includes a comprehensive cybersecurity evaluation, the report for which must be submitted to the central bank within a six-month window. The company disclosed that it had applied for the license in December 2025, a detail it previously shared during its June-quarter earnings release.
The current situation follows regulatory challenges that began in January 2024, when the RBI barred Paytm Payments Bank from accepting fresh deposits, credits, or wallet top-ups due to persistent compliance concerns. These restrictions, which took effect in March of that year, forced the organization to shift its operations to other banking partners to maintain service continuity.
Key facts
- Paytm Payments Services Limited received in-principle approval from the RBI to issue prepaid instruments.
- The company must submit a mandatory systems and cybersecurity audit report within six months.
- The license application was originally filed by the firm in December 2025.
- Paytm's share price hit a record high of Rs 1,960 following the news.
- Regulatory restrictions in January 2024 had previously disrupted the firm's wallet services.
Why it matters
The approval allows the fintech firm to resume its flagship consumer offerings, provided it meets the final compliance standards set by the RBI. If the required audit reports are not submitted within the stipulated six-month period, the current in-principle authorization will lapse.
Source: Economic Times, Indian Express
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