Paytm's wallet business gets a fresh lease of life with RBI nod

Paytm gets crucial RBI nod, inches closer to bringing back prepaid wallet servicesThe stock climbed to a record Rs 1,960 following the development, reflecting investor optimism.Paytm has received a regulatory boost for its payments business, with the Reserve Bank of India (RBI) granting preliminary authorisation to its wholly owned subsidiary to issue and operate prepaid payment instruments (PPIs), including digital wallets.In a stock exchange filing dated November 13, One 97 Communications, the parent company of Paytm, said its subsidiary Paytm Payments Services Limited (PPSL) had received an in-principle authorisation from the RBI to set up and operate a payment system for issuing prepaid payment instruments in India.The authorisation is subject to compliance with the RBI's Master Directions on Prepaid Payment Instruments, dated August 27, 2021, as updated from time to time.WHAT DOES THE RBI APPROVAL MEAN FOR PAYTM?Prepaid payment instruments allow users to load money in advance and use it to make payments for goods and services. Digital wallets are a common example of such instruments. The latest development is an important step for Paytm as it looks to strengthen its presence in India's digital payments market. However, the in-principle authorisation does not mean the company can immediately start offering wallet services.In its exchange filing, Paytm clarified that PPSL will be able to offer prepaid instruments, including wallets, to customers only after receiving the final authorisation or Certificate of Authorisation from the RBI. This is a developing story. It will be updated.- Ends