Paytm, a leading fintech company, has received approval from the finance ministry to invest in its payment services business, as announced on Wednesday. The company, also known as One 97 Communications, has been closely monitored by banking regulators and financial crime-fighting agencies since the central bank’s directive in January to close its payments bank.
With the recent approval, Paytm is gearing up to submit a new application to the ministry to reclaim the license for its payments services business. Paytm Payment Services will continue to offer online payment aggregation services to its existing partners.
While the specifics of the approved investment were not disclosed, Reuters reported in July that the company had secured approval for a 500 million rupee investment in its payments division. Paytm Payment Services, a significant revenue contributor, accounted for a quarter of the company’s consolidated revenue in the fiscal year ending in March 2023.
In July, Vivek Joshi, financial services secretary, mentioned that the company could seek a payment aggregator license from India’s central bank, subject to evaluation. Following the announcement, Paytm’s shares closed 1.3% lower. Since the directive to wind down the payment bank in January, the company’s shares have declined over 29%.
