Paytm, a prominent fintech company, has secured approval from the finance ministry to invest in its payment services business, the company announced on Wednesday.
The company, officially known as One 97 Communications, has been under the watchful eye of banking regulator and financial crime-fighting agency following the central bank’s directive in January to shut down its payments bank.
With the recent approval, Paytm plans to submit a new application to the ministry to regain the license for its payments services business. The company said that Paytm Payment Services will continue to provide online payment aggregation services to existing partners.
Although Paytm did not disclose the specifics of the approved investment, Reuters reported in July, based on information from a senior finance ministry official, that the company had obtained approval for a 500 million rupee (approximately $6 million) investment in its payments division.
Paytm Payment Services, a significant component of the fintech firm’s operations, contributed a quarter of its consolidated revenue in the fiscal year that ended in March 2023.
In July, Vivek Joshi, financial services secretary, said that the company could approach India’s central bank to apply for a payment aggregator license, which the bank would then assess.
On the day of the announcement, Paytm’s shares closed 1.3% lower. Since the central bank’s order to wind down the payment bank in January, the company’s shares have declined by more than 29%.