Tuesday, May 21, 2024

Paytm Payments Services receives extension in time from RBI to resubmit PA license application

One 97 Communications (OCL), on Sunday said that its Paytm Payment Services (PPSL) has received an extension of time from RBI for resubmitting the payments aggregator (PA) license application. RBI has allowed the platform to continue its online payment aggregation business while awaiting government approval for past investment from the parent into PPSL.

In its regulatory filing, Paytm said, “we would like to inform you that we have recently received an extension of time from RBI for resubmission of the application.”

The letter from RBI says that “PPSL can continue with the Online Payment Aggregation business, while it awaits approval from Government of India (‘GoI’) for past investment from OCL into PPSL as per FDI Guidelines.”

PPSL was required to resubmit the PA license application within 120 calendar days, however, this timeframe has surpassed.

As per the latest letter from RBI, once it receives the government’s approval, PPSL will have fifteen days to submit the application seeking authorisation for PPSL to operate as an online PA.

However, Paytm said, “if any adverse decision is taken by the GoI, then the same shall be informed to RBI immediately.”

“During this process, PPSL can continue with its online payment aggregation business for existing partners, without onboarding any new merchants,” it said.

Paytm ensures that this delay for the PA license will not have any material impact on its business and revenues, since the communication from RBI is applicable only to the onboarding of new online merchants.

Thereby, PPSL can continue to provide payment services to our existing online merchants.

Further, in regards to offline business, OCL can continue to onboard new merchants and offer them payment services including All-in-One QR, Soundbox, Card Machines, etc.

In November last year, PPSL was required to resubmit the PA license application after it sought approval for past downward investment from the One 97 into PPSL, to comply with FDI Guidelines; and not onboard new online merchants.

PPSL is a 100% subsidiary of One 97.

As per the guidelines, online non-bank payment aggregators (PAs) existing as on March 17, 2020 were required to apply to RBI for seeking authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act).

RBI advised all stakeholders to transact with only those existing PAs who have been granted in-principle authorisation or whose application is currently under process.

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