Paytm is moving closer to bringing its digital wallet business back into action, nearly two years after regulatory restrictions disrupted its operations. Its wholly owned subsidiary, Paytm Payments Services Ltd (PPSL), has received in-principle authorisation from the Reserve Bank of India (RBI) to set up and operate a payment system for issuing prepaid payment instruments (PPIs), including digital wallets.
The development marks a significant step for the fintech company, whose wallet services were affected by RBI restrictions on Paytm Payments Bank in 2024. The disruption impacted a key part of Paytm’s payments ecosystem, making the latest approval an important milestone in its efforts to rebuild its digital payments business.
However, the in-principle nod is not a final clearance to restart operations. PPSL must complete a system audit and cybersecurity audit within six months and submit the required reports to the RBI. It will also need final authorisation from the regulator before resuming wallet services.
For Paytm, the potential return of its wallet business could mean more than restoring an old offering. As India’s digital payments market becomes increasingly competitive, the move could help the company strengthen its payment ecosystem, reconnect with users and create new opportunities for growth. The comeback is not official yet, but the regulatory approval brings Paytm one step closer to reopening that chapter.
