Paytm receives RBI's in-principle approval to resume wallet business
What's the story
Paytm has received in-principle approval from the Reserve Bank of India (RBI) to restart its digital wallet business. The approval was granted to Paytm Payments Services Limited (PPSL), a subsidiary of One 97 Communications, the parent company of Paytm. The green light comes nearly three years after regulatory action against Paytm Payments Bank disrupted the service.
Business revival
Approval subject to final authorization
The RBI's approval allows Paytm Payments Services to establish a system for issuing and operating prepaid payment instruments (PPIs), including digital wallets.
However, this is subject to final authorization from the central bank.
The company has been given six months to complete a systems audit, including a cybersecurity audit, and submit the report to the RBI.
Failure to do so within this timeframe will result in automatic lapse of the in-principle authorization.
Past challenges
Regulatory restrictions halted wallet operations
The approval is a major development for Paytm, whose wallet was once a key consumer offering.
However, regulatory restrictions had forced the company to stop fresh deposits and top-ups.
In January 2024, the RBI barred Paytm Payments Bank from accepting new deposits and credits due to persistent compliance concerns.
The restrictions disrupted several services and forced Paytm to shift its payments operations to other banking partners.
Future plans
Fresh PPI license applied through PPSL
Paytm had applied for a fresh PPI license through PPSL.
This was the company's first formal step toward reviving its wallet business after the RBI canceled the banking license of Paytm Payments Bank in April 2026.
The company disclosed this application in its June-quarter earnings release, emphasizing that a wallet would enhance its consumer payments offerings and provide consumers with more payment options.
License cancelation
Wallet previously operated by Paytm Payments Bank
The wallet business was previously run by Paytm Payments Bank. But after the RBI imposed regulatory restrictions on the bank in 2024, customers were not allowed to add money to their wallets, although they could withdraw existing balances.
The RBI canceled the bank's license on April 24, 2026, for non-compliance with licensing conditions and regulatory requirements.