On January 31, the Reserve Bank barred Paytm Payments Bank Ltd (PPBL) On January 31, the Reserve Bank barred Paytm Payments Bank Ltd (PPBL) On January 31, the Reserve Bank barred Paytm Payments Bank Ltd (PPBL) The central government is examining foreign direct investment from China in Paytm Payments Services Ltd (PPSL), sources told news agency PTI on Sunday. PPSL is the payment aggregator subsidiary of One97 Communications Ltd, which has investment from Chinese firm Ant Group Co.
In November 2020, PPSL applied for licence with the Reserve Bank of India (RBI) to operate as a payment aggregator under the guidelines on Regulation of Payment Aggregators and Payment Gateways. However, in November 2022, RBI rejected PPSL's application and asked the company to resubmit it, to comply with Press Note 3 under FDI rules.
Subsequently, PPSL filed the required application on December 14, 2022 with the Government of India for past downward investment from One97 Communications Ltd (OCL) into the company to comply with Press Note 3 prescribed under FDI guidelines.
Now, an inter-ministerial committee is examining investments from China in PPSL and a decision would be taken on the FDI issue after due consideration and comprehensive examination, sources told the news agency.
Under Press Note 3, the government had made its prior approval mandatory for foreign investments in any sector from countries that share land borders with India to curb opportunistic takeovers of domestic firms. China is among the countries that share the land border with India.
On January 31, the Reserve Bank barred Paytm Payments Bank Ltd (PPBL), an associate company of OCL, from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, and FASTags, among others after February 29, 2024. The central bank said the move was taken after persistent non-compliance and continued material supervisory concerns in PPBL, warranting further supervisory action.
The RBI's move triggered a heavy sell-off of Paytm stocks, which plunged more than 40 per cent in three days.
In March 2022, the RBI barred PPBL from onboarding new customers with immediate effect.
On Friday, shares of Paytm declined 6 per cent to settle at Rs 419.85 on the BSE.
(With inputs from PTI)