Paytm shares hit record high on RBI nod to revive digital wallet
What's the deal? Paytm has received in-principle approval from the Reserve Bank of India to restart its digital wallet business, nearly three years after regulatory action halted the offering. The nod goes to subsidiary Paytm Payments Services Limited, letting it set up a system to issue and operate prepaid payment instruments, including wallets, subject to final authorisation. The parent company, One 97 Communications, disclosed the approval in a stock exchange filing on Friday.
Why now? The approval follows years of regulatory pressure. The Reserve Bank of India barred Paytm Payments BankDealroom has a profile for this one. Try Dealroom → from accepting fresh deposits and wallet top-ups in 2024 over compliance and supervisory concerns, then cancelled its banking licence earlier this year.
What's the catch? The approval is only preliminary. Paytm Payments Services must pass a systems and cybersecurity audit within six months and secure final authorisation before it can issue wallets to customers.
Why it's structured this way? The nod goes to a separate subsidiary, not Paytm Payments Bank, whose licence was cancelled. That distinction lets Paytm rebuild a lost product through a cleaner entity.
What's the endgame? Paytm has kept rebuilding its payments business under other regulatory approvals since the 2024 disruption. Restoring the wallet would restore a core consumer product it lost during the shutdown.
Investor reaction: Investors welcomed the news. Paytm shares rose to a record high of 1,960 rupees on Friday.
The signal: The decision is a meaningful step toward restoring a former product, not an immediate restart or a guarantee of recovery. Paytm faces entrenched rivals and has lost UPI share since the 2024 disruption, so regaining its former position is far from certain.
Read more: Bloomberg
Image credit: Horasis
