Following this announcement, the approval still has to be vetted by the finance ministry and it is expected to remove the main block to the unit, Paytm Payment Services, which will resume normal business operations.
In addition, the company will continue to focus on meeting the needs, preferences, and demands of clients and users in an ever-evolving market, while also prioritising the process of remaining compliant with the regulatory requirements and laws of the local industry.
Paytm Payment Services represents one of the biggest remaining parts of the fintech firm's business, which accounts for a quarter of consolidated revenue in the financial year that ended in March 2023. A separate unit entitled Paytm Payments Bank was wound down this year by order of the central bank because of persistent compliance issues which triggered a meltdown in the overall company’s stock.
The government panel also held back the approval due to concerns about the 9.88% stake in Paytm that was held by China’s Ant Group. At the same time, India has intensified scrutiny of Chinese businesses since a 2020 border clash between the two countries.
According to Reuters, Paytm waited for approval from the government panel for about two years, since it would need to also wind down its payment services businesses without it, which was forbidden to take action on onboarding new customers in March 2023.
Once the approval has been formalised, it will be able to seek a payment aggregator licence from the Reserve Bank of India. At the same time, India’s foreign, home, finance, and industries ministries did not reply to emails seeking comment. Officials from the company mentioned that it will continue to make disclosures in compliance with the obligations under the SEBI Regulations, and it will inform the exchanges when there is any new material information that needs to be shared.
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