Paytm Gets RBI In-Principle Nod to Revive Wallet

The in-principle approval goes to a different subsidiary from the bank whose licence was cancelled in April, and a final authorisation is still needed before wallets can return.

Paytm has taken a step towards reviving its wallet business. The Reserve Bank of India (RBI) on Friday, November 13, gave in-principle authorisation to Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications, to set up and operate a payment system for prepaid payment instruments (PPIs), including digital wallets. The approval does not allow PPSL to launch wallet services yet.

What the Approval Says

The RBI’s Department of Payment and Settlement Systems issued the approval in a letter dated November 13, under the Payment and Settlement Systems Act, 2007. Paytm disclosed it in a stock exchange filing. The company said that after final authorisation, or a certificate of authorisation, is granted, PPSL can offer prepaid instruments such as a wallet to its customers.

The approval comes with a condition. PPSL must complete a system audit, including a cybersecurity audit, as laid out in the RBI’s Master Directions on Cyber Resilience and Digital Payment Security Controls for non-bank payment system operators, dated November 5, 2026. The report must reach the RBI within six months of the letter. If it does not, the in-principle authorisation lapses automatically and the final authorisation will not be considered.

Why Paytm Needed a New Licence

Paytm’s wallet used to operate through Paytm Payments Bank Limited (PPBL). On April 24, 2026, the RBI cancelled the bank’s banking licence under Section 22(4) of the Banking Regulation Act, 1949, with effect from the close of business that day. In its press release, the RBI said the bank’s affairs were conducted in a manner detrimental to the interest of the bank and its depositors, and it cited non-compliance with licensing conditions.

After the cancellation, Paytm began rebuilding the wallet business under a separate entity. PPSL applied to the RBI for a fresh PPI licence in July 2026, and the company disclosed the application in its June-quarter investor presentation, saying that a wallet would add to the completeness of its consumer payments offerings. The latest approval has been granted to PPSL, not to Paytm Payments Bank.

PPSL’s Regulatory Track Record

PPSL has already been through a similar process once. The RBI gave it in-principle approval to operate as an online payment aggregator in August 2025, ending a long freeze on onboarding new online merchants, and granted the final certificate of authorisation on November 26, 2025. That final nod came about three months after the in-principle approval. A PPI licence is a separate approval, and the six-month audit condition means the timeline for wallets is not yet known.

Market Reaction

Paytm shares rose after the announcement, touching a 52-week high of Rs 1,960 during Friday’s session, about 1.8 per cent higher. They later traded near Rs 1,928, up 0.26 per cent. Goldman Sachs has a “Buy” rating on the stock with a target price of Rs 2,010. Reports say the shares are up about 49 per cent so far this year.

What It Means for Users

For now, nothing changes for customers: there is no announced launch date for the revived wallet, and the company needs final authorisation first. The approval signals that the RBI is willing to consider a wallet run by Paytm’s payments subsidiary, provided that it meets the cybersecurity and system audit requirements.

What to Watch Next

The key questions are how quickly PPSL completes and submits its audit, when the RBI grants the final authorisation, and when Paytm announces a launch plan and what features the new wallet will have. Any missed deadline would cause the in-principle approval to lapse.