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Indian Economy

Paytm subsidiary receives preliminary wallet authorisation; final RBI approval is still required

2026-11-15

Illustrative smartphone icon, not the Paytm app or evidence that wallet services have launched.

Paytm Payments Services Ltd has received in-principle authorisation from the Reserve Bank of India to set up a payment system for prepaid payment instruments, including wallets. The company is a wholly owned subsidiary of One 97 Communications. A stock-exchange disclosure said the RBI letter was dated 13 November and issued under the Payment and Settlement Systems Act, 2007.

The preliminary approval does not permit PPSL to start issuing wallets immediately. It must first obtain final authorisation or a Certificate of Authorisation after meeting the regulator's conditions. The step therefore advances its application rather than confirming that wallet operations have already resumed. Paytm had disclosed the application in its first-quarter FY2027 earnings release.

System and cybersecurity audits come before a launch

PPSL must undertake a system audit, including a cybersecurity audit, using an auditor empanelled with CERT-In or a qualified information-systems auditor. The review must address the RBI's 5 November 2026 cyber-resilience and digital-payment security controls for non-bank payment-system operators. Compliance with payment-data storage requirements in the RBI's 6 April 2018 circular is also required, alongside the updated 2021 PPI Master Directions.

The audit report must be submitted within six months of the RBI letter. Failure to meet that deadline would cause the in-principle authorisation to lapse automatically, with final authorisation not considered thereafter under the stated conditions. Changes in shareholding or ownership must follow the regulator's July 2022 rules on control changes and transfer of non-bank payment-system activities.

Paytm shares closed 1.14 percent higher at Rs.1,945 on Friday, a market reaction rather than evidence of regulatory completion. PPSL is distinct from Paytm Payments Bank Ltd, whose banking licence the RBI cancelled on 24 April 2026 after earlier restrictions and supervisory concerns. The new preliminary PPI permission should not be described as restoration of that bank's licence, removal of all previous restrictions or authorisation for every Paytm-branded service.

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