Amid speculations Paytm clarifies licensing process status Government champion fintech

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New Delhi. Fintech major Paytm on Tuesday clarified the status of its licensing process amid recent speculations, saying it has not received any communication suggesting moratorium or penalty and any assumption to the contrary is completely baseless and misleading.

Recent media reports speculated about postponement of Paytm Payment Services Limited’s (PPSL) license application and possible fines.
A company spokesperson said the information appeared to be speculation, as the government has consistently supported fintech initiatives.

“We provide information promptly upon request in the ongoing application process, with no indication of denial or penalty,” a company spokesperson said in a statement. In line with the government’s vision, supporting Paytm as a domestic entity is important to empower Indian companies to compete globally and drive technological advancements.

PPSL is a wholly owned subsidiary of One97 Communications Limited (OCL) and had applied for Online Payment Aggregator (PA) license for online merchants.

Formation of PPSL The transfer of online payments business from OCL to PPSL and infusion of capital into PPSL was necessitated by RBI guidelines which mandated that the PA business be spun off into an independent legal entity.

According to the company, without such requirement, online payment business would have continued only in OCL.

The spokesperson said Paytm is an Indian company, founded by an Indian citizen, with our founder CEO being the largest shareholder and sole SBO (significant beneficial owner) of One 97 Communications Limited (OCL), which is committed to supporting indigenous entrepreneurship and innovation. Underlines its commitment towards.

The spokesperson further said that while all KMPs (key managerial personnel) and board members of OCL are of Indian origin, Antfin does not have any board representation or special rights. As explained, PPSL was formed for transfer of online payments business and investment of Rs 50 crore to comply with RBI regulations.

The regulator later requested PPSL to seek necessary approvals and resubmit the application for investment of Rs 50 crore in PPSL.

According to the company, it is clarified that the investment of Rs 50 crore was made from the existing cash reserves of OCL and no Chinese capital was raised by OCL after the inception of 2020 Press Note 3. Additionally, capital of Rs 50 crore was required to comply with RBI’s minimum net worth norms and meet the liquidity needs of PPSL.

According to the company’s stock exchange filing on March 26, 2023, the regulator granted PPSL an extension and requested a resubmission, which PPSL promptly complied with.

It said during the pending process PPSL was allowed to continue its online payment aggregation business for existing partners without onboarding any new merchants.

–IANS

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