Paytm gets the RBI's first nod to bring back its wallet, this time through Paytm Payments Services

Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of Paytm parent One 97 Communications, has received in-principle authorisation from the Reserve Bank of India to set up and run a payment system for prepaid payment instruments, the licence category that covers digital wallets. The company told the stock exchanges on 13 November that the RBI's Department of Payment and Settlement Systems granted the approval under the Payment and Settlement Systems Act, 2007, in a letter dated the same day.

This is the first concrete step back for a product that once defined Paytm. Its wallet used to run through Paytm Payments Bank. After the RBI's restrictions on that bank in 2024, customers could no longer add money to their wallets, though they could still withdraw existing balances. The RBI then cancelled the bank's licence on 24 April 2026, saying its affairs were run in a way that hurt the bank and its depositors and that it had not met the conditions of its licence. The new approval goes to PPSL, a separate company, not to the payments bank.

The approval comes with a clock. Paytm cannot launch wallets yet. It can start issuing prepaid instruments only after it gets a final authorisation, called a Certificate of Authorisation. To get there, PPSL must commission a system audit, including a cybersecurity audit, from an eligible auditor, checked against the RBI's new Master Directions on cyber resilience and digital payment security for non-bank payment operators dated 5 November 2026. The report must reach the RBI within six months. If it does not, the in-principle approval lapses on its own and the RBI will not consider a final licence.

The RBI also reminded PPSL that it must follow the central bank's rules on storing payment data and must get prior approval for any change in its shareholding or ownership. According to the filings reported by YourStory and ET Now, PPSL had applied for the authorisation on 31 December 2025, and Paytm flagged the wallet application in its Q1 FY2027 earnings release, saying a wallet would round out its consumer payments offering.

For users, nothing changes today. The real test is the audit: if Paytm clears it inside six months, India's best known wallet brand could return to a market now dominated by UPI apps. YourStory noted the stock barely moved on the news, trading about 0.3 percent higher on Friday afternoon after a 7.31 percent jump to a 52 week high the day before.