Paytm wins preliminary RBI approval for wallet licence; stock hits peak

what happened

Paytm's payments services unit received preliminary clearance from the Reserve Bank of India to run a payment system that issues prepaid instruments, wallets included, Reuters reported. On Friday the fintech's shares rose to a record 1,960 rupees.

Full operation requires the unit to obtain the central bank's final authorisation, the company said in a regulatory filing. Once that is granted, Paytm Payments Services could start offering prepaid products and wallets to customers.

The step comes more than two years after the RBI stopped Paytm Payments Bank from taking new deposits and wallet top-ups because of ongoing compliance failures and supervisory worries, which largely froze normal wallet activity. Earlier this year the regulator also cancelled that bank's banking licence, and the latest decision lets the wholly owned subsidiary work toward restarting wallet services.

why it matters

For investors this marks a tentative return path for Paytm after months of restrictions, since wallet operations are central to its consumer business. The approval is preliminary, so the final licence remains the key milestone to watch.

market impact

Paytm shares: preliminary approval eases regulatory overhang, supporting the stock

• ▲Paytm shares pressure up — regulatory progress reopens a path to restarting wallet services

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instruments