RBI gives Paytm arm in-principle nod to resume wallet services; final approval still pending

The Reserve Bank of India (RBI) has given in-principle approval to a Paytm subsidiary to resume services such as a digital wallet. The news has raised hopes that the Paytm wallet service will return, and it is being seen as a relief for people who use the Paytm wallet.

Paytm's parent company, One97 Communications, told the stock exchanges that the RBI had granted the in-principle approval to its subsidiary, Paytm Payments Services Limited (PPSL). According to the company, the approval was given on November 13.

People are moving to digital methods in large numbers. Online payments have grown considerably, and since they began, people have kept less cash with them.

On hearing of the in-principle approval, people may think the Paytm wallet service will start immediately, but that is not the case. In-principle approval does not mean the wallet service will begin at once. To restart the service, the company will have to obtain final approval from the RBI.

It is also true that after in-principle approval, the company can move towards offering services such as a digital wallet. However, it must comply with the RBI's August 2021 norms, along with any changes made to them.

As final approval, the company will have to obtain one more clearance from the RBI, called a "certificate of authorisation". Only after this final approval is granted will the company be able to offer wallet services to its customers.

Paytm users will therefore have to wait for the wallet service to resume. The company has received in-principle approval from the RBI, but final approval is still pending. Users should watch for official information from the company, and other payment options can be used until then.