One97 Communications Ltd (OCL), which owns the brand Paytm, has received the Finance Ministry’s approval for its “downstream investment” into Paytm Payment Services Ltd (PPSL), which is a payment services business of the fintech major.
“We would like to inform you that PPSL has received approval from the Government of India, Ministry of Finance, Department of Financial Services, vide its letter dated August 27, 2024, for downstream investment from the Company into PPSL,” OCL said in a stock exchange filing on Wednesday.
With this finance ministry approval in place, PPSL will resubmit application for its payment aggregator (PA) licence. In the meantime, PPSL will continue to provide online payment aggregation services to existing partners, OCL added.
PPSL was set up by OCL to get a payment aggregator licence. It first approached RBI for a PA licence in 2020. However, the RBI directed it to resubmit the application to comply with FDI rules.
OCL then had make an application to the government for approving its downward investment in PPSL so as to ensure compliance with the FDI rules.
RBI introduced the PA framework in March 2020. According to this PA framework, payment gateways must secure an aggregator licence for acquiring merchants and delivering digital payment acceptance solutions.