Paytm has received the green light from the central government to proceed with foreign direct investment (FDI) in its payment aggregator business, Paytm Payment Services. This division is a significant part of Paytm's operations, contributing to a quarter of the company's consolidated revenue for the financial year ending in March 2023.

The government has approved Paytm's proposal to invest 500 million rupees (approximately $5.97 million) into this crucial subsidiary, as confirmed by a senior finance ministry official on Friday. This approval, which had been delayed for several months due to Paytm's connections with China, clears the way for Paytm Payment Services to resume normal business operations.

The resolution of this regulatory hurdle is expected to bolster Paytm's position in the fintech sector, allowing it to continue expanding its payment services. The approval underscores the government's confidence in Paytm's ability to contribute to the digital payment ecosystem in India.

Last month, reports surfaced indicating that the government had finally approved the investment, bringing relief to the company and its stakeholders.

Paytm set up Paytm Payment Services to obtain a Payment Aggregator (PA) license. Although the company first sought the PA license in 2020, the Reserve Bank of India (RBI) instructed Paytm to reapply to ensure adherence to FDI regulations.

The RBI introduced the PA framework in March 2020, requiring payment gateways to obtain an aggregator license to manage merchant acquisition and provide digital payment acceptance solutions.

Latest Updates:

SEBI Issues Administrative Warning to Paytm Over Unapproved Transactions

New Capital Gains Tax Structure: FM Sitharaman Explains Modi 3.0 Government's Strategy

PLI Scheme: Mobile, Component Manufacturers Invest Over Rs 8,000 Cr, Says Reports