Paytm has taken an important step towards restarting its digital wallet business after the Reserve Bank of India (RBI) granted in-principle authorisation to its wholly owned subsidiary, Paytm Payments Services Limited (PPSL), to issue and operate prepaid payment instruments (PPIs), including digital wallets.
According to a regulatory filing by One 97 Communications, the RBI granted the approval on November 13, 2026, under the Payment and Settlement Systems Act, 2007. The authorisation is subject to compliance with the central bank’s Master Directions on Prepaid Payment Instruments.
As part of the approval process, PPSL must complete a system audit, including a cybersecurity audit, and submit the report to the RBI within 6 months. If the company fails to meet this deadline, the in-principle authorisation will automatically lapse.
However, the approval does not allow Paytm to start issuing wallets immediately. PPSL can begin operations only after receiving the RBI’s final authorisation or Certificate of Authorisation.
Paytm had applied for a fresh PPI licence through PPSL in July 2026. The application marked its first formal move towards restoring its wallet business after the RBI cancelled the banking licence of Paytm Payments Bank in April 2026.
The company had earlier disclosed the application in its June-quarter investor presentation, stating that a wallet would make its consumer payments offering more complete and give users access to multiple payment options.
Paytm’s wallet services were previously operated through Paytm Payments Bank. However, following regulatory restrictions imposed on the bank in 2024, customers were no longer allowed to add money to their wallets, although they could withdraw existing balances.
On April 24, 2026, the RBI cancelled Paytm Payments Bank’s licence, citing non-compliance with licensing conditions and regulatory requirements. The central bank also stated that the bank’s affairs and management were detrimental to depositors’ interests and public interest.
The latest in-principle approval brings Paytm closer to restoring its wallet services under PPSL. However, the company must secure the RBI’s final authorisation before it can resume issuing digital wallets.
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