-, Jul 09, 2024, India Blooms News Service
Mumbai: Paytm, which has been struggling after RBIs operational restrictions on its payments arm Paytm Payment Bank, has received approval from a government panel overseeing China-related investments to inject 500 million rupees ($6 million) into a significant subsidiary, media report.
This approval, pending review by the finance ministry, will eliminate the primary obstacle preventing Paytm Payment Services from resuming regular operations, Reuters reported.
Paytm Payment Services is a crucial part of the fintech companys business, contributing to a quarter of its consolidated revenue for the financial year ending March 2023.
Meanwhile, another unit, Paytm Payments Bank, was shut down earlier this year by the RBI due to ongoing compliance issues, causing a sharp decline in Paytms stock value.
The government panel had previously withheld approval due to concerns over the 9.88% stake in Paytm held by Chinas Ant Group.
Indias scrutiny of Chinese businesses has increased since a 2020 border conflict between the two nations.
Paytm had been awaiting this approval for about two years, without which it would have had to shut down its payment services business, which was barred from accepting new customers in March 2023.
A Paytm spokesperson said the company does not comment on market speculation. 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, the spokesperson said.
Upon formal approval, Paytm can apply for a payment aggregator license from the Reserve Bank of India.
The sources, including two government officials, requested anonymity as the decision has not been officially announced.
Representatives from foreign, home, finance, and industries ministries, which are part of the panel, did not respond to Reuters requests for comment