Paytm will soon be able to start the wallet again. That means money will already be deposited in the wallet and customers will be able to use this amount for shopping, paying bills or transferring money. For this, the company has received initial approval from the bank regulator RBI. After the closure of Payments Bank, now the company will be able to run the wallet business independently. Not only this, after getting the final approval, the way to enter prepaid card business will also open.
Friday proved to be a very good day for Paytm. The Reserve Bank of India (RBI) has given initial approval to the company’s payment services unit Paytm Payments Services to issue prepaid payment instruments. This also includes digital wallets. After this news, Paytm shares rose and the stock reached record high.
The company said that after getting the final approval from RBI, Paytm Payments Services will be able to provide the facility of prepaid payment instrument to the customers. This will give Paytm an opportunity to run its wallet business separately and independently from Paytm Payment Bank.
Company will also be able to enter prepaid card business
RBI approval can open new business opportunities for Paytm. Apart from digital wallet, this also includes prepaid card business.
According to Anand Dama, Executive Director of Nuvama Institutional Equities and Head of Banking and Financial Services Research, this approval can open new avenues of earning for Paytm. This also indicates less regulatory pressure on the company, which is positive for the shares.
However, Dama also said that only preliminary approval has been received. It will take time to get the final license. In such a situation, if this approval has any impact on the company’s earnings, it may be visible in the financial year 2028.
Shares rose 1.8% to record high
After the news of RBI’s initial approval, there was a rise in Paytm shares on Friday. The stock rose 1.8% to Rs 1,960 during trading. In the end it closed with a gain of 0.8%.
Paytm’s shares have increased by about 50% so far this year. Strong growth in various businesses of the company is also being considered as the reason for this rise.
Paytm’s wallet business started in 2014?
Paytm started its digital wallet business in 2014. Within a few years it became the largest digital wallet in the country. In the year 2017, as per regulatory requirements, the company had transferred this business to Paytm Payments Bank.
But in 2022, RBI stopped the bank from adding new customers. After this, in January 2024, the central bank imposed more stringent restrictions. The bank was stopped from taking new deposits, accepting credit and providing top-up facility to the accounts and wallets of existing customers.
RBI had taken these steps due to concerns related to lack of compliance with continuous rules and monitoring. Due to these restrictions, the normal process of depositing money in Paytm wallet almost came to a standstill.
This year, RBI also canceled the banking license of Paytm Payments Bank, after which the process of closing the bank started. Now the initial approval received by Paytm Payments Services is an important step towards restarting the wallet business of the company. However, final approval of RBI will be required for this.
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Source: ndtv.in
