Paytm gets RBI's in-principle nod to revive wallet biz

Bengaluru: Paytm has received in-principle approval from the Reserve Bank of India (RBI) to issue and operate digital wallets through its subsidiary Paytm Payments Services Ltd (PPSL), nearly three years after regulatory action against Paytm Payments Bank Ltd (PPBL) halted the offering.

The approval allows PPSL to issue and operate prepaid payment instruments, including digital wallets, subject to final authorisation, the company said in a stock exchange filing on Friday.

PPSL must complete a systems audit, including a cybersecurity audit, and submit the report to the RBI within six months, failing which the in-principle approval would lapse.

The company had applied for the licence in December 2025 and disclosed the application in its June-quarter earnings release.

Paytm's wallet was once among its flagship products before the RBI, in January 2024, barred PPBL from accepting fresh deposits and credits, including wallet top-ups, citing persistent compliance concerns. The restrictions, which took effect that March, disrupted several services and forced Paytm to shift its payments operations to other banking partners.

The regulator subsequently cancelled PPBL's banking licence in April 2026, citing concerns over its operations and management. The Delhi High Court ordered the bank's winding up in July.

Paytm has since rebuilt its payments business independently of the bank, securing regulatory approvals and expanding its merchant and financial services operations.

In November 2025, PPSL received its final online payment aggregator licence, followed by authorisations for offline and cross-border payment aggregation in December. These approvals allowed it to consolidate its merchant payments operations.

The regulatory setbacks had also triggered a steep decline in Paytm's share prices, which fell to a record low of ₹310 in May 2024. The stock has since recovered sharply, crossing ₹1,900 on Thursday for the first time since its November 2021 listing-when it was priced at ₹2,150.

The recovery comes amid an improvement in Paytm's performance. For the September quarter, the company reported a more than tenfold increase in consolidated net profit to ₹225 crore from ₹21 crore a year earlier, while revenue from operations rose 28% to ₹2,648 crore.