New Delhi: India’s Paytm has reportedly obtained approval from a government panel overseeing investments tied to China to invest 500 million rupees ($6 million) in its crucial subsidiary, according to three sources familiar with the matter. The approval, pending final vetting by the finance ministry, marks a significant step toward enabling Paytm Payment Services to resume normal operations.
Paytm Payment Services stands as a pivotal segment of the fintech giant’s operations, contributing a quarter of its consolidated revenue in the fiscal year ending March 2023. Following the closure of Paytm Payments Bank earlier this year due to regulatory compliance issues, the subsidiary’s recovery is critical to stabilizing Paytm’s market performance.
Previously withheld due to concerns over China’s Ant Group holding a 9.88% stake in Paytm, the panel’s approval comes amidst heightened scrutiny of Chinese investments in India following geopolitical tensions since 2020.
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The awaited nod from the government panel, pending for nearly two years, prevented Paytm from expanding its payment services, which ceased accepting new customers in March 2023. With formal approval anticipated, Paytm plans to apply for a “payment aggregator” license from the Reserve Bank of India.
Sources familiar with the matter, including two from the government, spoke on condition of anonymity due to the decision’s pending announcement. Responses from India’s foreign, home, finance, and industries ministries, which are represented on the panel, were not received.
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A Paytm spokesperson declined to comment on market speculation, stating, “We will continue to make disclosures in compliance with our obligations under the SEBI Regulations, and will inform the exchanges when there is any new material information to share.”
According to an international news agency Reuters’ report, they did not immediately ascertain the rationale behind the panel’s revised decision.
