New Delhi: The inter-ministerial panel that oversees investments linked to China is yet to give its approval to Paytm’s proposal to invest in its payment aggregator arm. The crisis-hit payment platform, Paytm has proposed making a Rs 50 crore investment in its 100 per cent subsidiary Paytm Payment Services Ltd (PPSL), according to a top government source.
As the proposal is still under consideration by the inter-ministerial panel, the government is expected to take a call soon. Paytm's parent entity One 97 Communications Ltd (OCL) has investment from China. The inter-ministerial panel has officials from foreign, home, finance and industries ministries, and is looking into whether the investment proposal of One 97 Communications Ltd (OCL) into PPSL is according to FDI guidelines or not.
It is also expected that if the inter-ministerial panel approves the proposal, Paytm can approach the RBI for a grant of payment aggregator licence. Later, the Reserve Bank of India will examine their proposal and take a call on providing a licence.
Paytm Payments Services Ltd applied for a licence with the Reserve Bank in November 2020 to operate as a payment aggregator under the guidelines on Regulation of Payment Aggregators and Payment Gateways. However, the apex bank rejected PPSL's application in November 2022.
The RBI asked the company to resubmit it to comply with Press Note 3 under FDI rules. One97 Communications Ltd (OCL), the parent company of Paytm Payments Services Ltd, has an investment from Chinese firm Ant Group Co.
Consequently, on December 14, 2022, OCL applied to the Indian Government for past downward investment from OCL into the PPSL to comply with Press Note 3 prescribed under FDI guidelines.
