Paytm shares hit a record high of Rs 1,960 on Friday after the Reserve Bank of India (RBI) granted in-principle authorization to its payments services arm.
The approval allows the company to set up and operate a payment system for issuing prepaid payment instruments (PPIs), including digital wallets.
Noida-based Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications, received the authorization letter dated November 13, 2026. The letter was issued by the RBI's Department of Payment and Settlement Systems under the Payment and Settlement Systems Act, 2007.
The approval is subject to compliance with the RBI's Master Directions on Prepaid Payment Instruments, dated August 27, 2021, as amended from time to time.
Key Highlights
- Paytm shares touched a record high of Rs 1,960 following the RBI approval.
- PPSL received in-principle authorization to issue prepaid payment instruments, including digital wallets.
- The company must complete a system and cyber-security audit within six months to secure final authorization.
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RBI Sets Conditions for Final Authorization
The RBI has laid down specific conditions that PPSL must meet before receiving final authorization. The company has been directed to conduct a system audit, including a cyber-security audit.
The audit must be carried out by an eligible professional or organization. These include an auditor empanelled with the Indian Computer Emergency Response Team (CERT-In), a Certified Information Systems Auditor (CISA) registered with the Information Systems Audit and Control Association (ISACA), or a holder of the Diploma in Information System Audit (DISA) qualification from the Institute of Chartered Accountants of India (ICAI).
PPSL must submit the system audit report to the RBI within six months from the date of the authorization letter.
If the company fails to submit the report within the specified period, the in-principle authorization will automatically lapse. In that case, the RBI will not consider granting final authorization.
RBI Approval Also Covers Ownership Changes
The central bank has also specified conditions concerning changes in the company's ownership and shareholding structure.
PPSL must obtain prior approval from the RBI before making any changes to its shareholding or ownership. The company has also been directed to refer to the central bank's guidelines governing the takeover or acquisition of control of non-bank payment system operators.
The in-principle approval marks an important regulatory step for Paytm's digital wallets business. However, the company must meet the RBI's audit and compliance requirements before securing final authorization to operate the payment system.
