Paytm Set to Reapply for Payment Aggregator Licence
Vijay Shekhar Sharma, the founder and CEO of Paytm, reaffirmed the company's intention to reapply for the Payment Aggregator (PA) licence from the Reserve Bank of India (RBI). Speaking at Paytm's Annual General Meeting, Sharma announced that the company would restart the application process โin due course,โ emphasizing Paytm's commitment to expanding its payment services business.
โWe will apply for the payment aggregator licence to the RBI in due course,โ Sharma said, highlighting the company's sustained focus on its growth in digital payment services.
Government Approval Boosts Paytm's Licence Reapplication
This announcement follows a significant development for Paytm Payments Services Limited (PPSL), a subsidiary of Paytm. The Ministry of Finance has granted permission for additional investment into PPSL, enabling Paytm to move forward with the PA licence process. In an official filing, Paytm confirmed: โPPSL has received approval from the Government of India, Ministry of Finance, Department of Financial Services, via its letter dated August 27, 2024, for downstream investment from the company into PPSL.โ
With this approval secured, PPSL will resubmit its PA licence application to the RBI. The company's initial application was rejected in November 2022, primarily due to non-compliance with Press Note 3, which mandates prior government approval for investments from countries sharing land borders with India.
PPSL to Continue Existing Services While Awaiting Reapplication
Although Paytm is preparing to reapply for the PA licence, PPSL will continue to offer online payment aggregation services to its current partners. Paytm reaffirmed this in a statement: โWith this approval in place, PPSL will proceed to resubmit its PA application. In the meantime, PPSL will continue to provide online payment aggregation services to existing partners.โ
The RBI had previously rejected Paytm's licence application due to non-compliance with Press Note 3 and instructed the company to meet the necessary conditions before reapplying.
Regulatory Challenges and Scrutiny on Paytm
One 97 Communications, the parent company of Paytm, has faced heightened regulatory oversight in recent years. In January, the RBI directed Paytm Payments Bank to halt the onboarding of new customers due to concerns over compliance with banking regulations. Additionally, the company has come under the watch of India's financial crime-fighting agency.
Conclusion
Paytm's journey toward securing a Payment Aggregator licence continues as it prepares to resubmit its application to the RBI. With the recent approval from the Ministry of Finance, Paytm is in a stronger position to meet regulatory requirements and strengthen its position in the digital payments ecosystem. While challenges remain, the company is determined to move forward, maintaining its role as a leading player in India's payments sector.
Read More:- https://enterslice.com/payment-aggregator-license
Source:- https://www.business-standard.com/companies/news/paytm-to-reapply-for-rbi-s-payment-aggregator-licence-post-govt-approval-124091200436_1.html
