Paytm gets RBI's in-principle approval for payment aggregator licence after 2022 setback

Vijay Shekhar Sharma-led Paytm Payments Services Ltd (PPSL), a wholly-owned subsidiary of One 97 Communications Ltd, has received in-principle authorisation from the Reserve Bank of India (RBI) to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007.

Paytm, in a stock exchange filing, said it received the RBI authorisation letter on August 12, 2025. This is a turnaround for the fintech major that had failed to secure the RBI approval for its payment aggregator licence application in November 2022. The RBI had asked the company to first comply with the FDI norms.

"It should be noted that this in-principle authorisation only covers online PA operations as defined in PA-PG Guidelines and transactions which do not fall under the ambit of the said guidelines including 'pay-out transactions undertaken on behalf of merchants should not be routed through escrow account designated for PA operation," the RBI said in its directions to Paytm.

However, as it's "in-principle authorisation", the RBI has asked Paytm to meet all its conditions, including getting a clean system audit report, in six months, following which it could be granted the final authorisation. "The applicant is advised to undertake a System Audit, including Cyber Security audit, to be conducted by a CERT-In empanelled auditor or a Certified Information Systems Auditor (CISA) registered with Information System Audit and Control Association (ISACA) or by a holder of a Diploma in Information System Audit (DISA) qualification of the Institute of Chartered Accountants of India (ICAI). The scope and coverage of the Audit to be undertaken is contained in the letter dated January 10, 2020 (enclosed)," the RBI said.

The RBI nod will allow Paytm to resume new merchant onboarding and they can use its gateway without any concerns. The RBI has clearly said Paytm must follow its payment aggregator guidelines with regards to KYC, fraud prevention and settlement timelines.

Paytm must also seek the RBI's approval in case of changes in shareholding or ownership or takeover or transfer of payment system activity of non-bank PSOs (payment system operators).

Paytm shares closed 0.20% down at Rs 1,119.95 on the BSE today.