Paytm Payments Services Crisis: Govt Examining FDI Flow from China, Says Report – News18

The authorities is analyzing overseas direct funding from China in Paytm Payments Services Ltd (PPSL), the cost aggregator subsidiary of One97 Communications Ltd, sources stated. In November 2020, PPSL had utilized for licence with the Reserve Bank of India (RBI) to function as a cost aggregator below the rules on Regulation of Payment Aggregators and Payment Gateways.

However, in November 2022, RBI rejected PPSL’s utility and requested the corporate to resubmit it, in order to adjust to Press Note 3 below FDI guidelines. One97 Communications Ltd (OCL) has funding from Chinese agency Ant Group Co.

Subsequently, the corporate filed the required utility on December 14, 2022 with Government of India for previous downward funding from OCL into the corporate to be able to adjust to Press Note 3 prescribed below FDI tips. An inter-ministerial committee is analyzing investments from China in PPSL and choice could be taken on the FDI challenge after due consideration and complete examination, sources stated.

Under Press Note 3, the federal government had made its prior approval necessary for overseas investments in any sector from international locations that share land border with India to curb opportunistic takeovers of home corporations following the COVID-19 pandemic. Countries which share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.

A question despatched to OCL for feedback remained unanswered until the submitting of the story. The Reserve Bank final month barred Paytm Payments Bank Ltd (PPBL), an affiliate firm of OCL, from accepting deposits or prime-ups in any buyer account, pay as you go devices, wallets, and FASTags, amongst others after February 29, 2024.

The Reserve Bank’s motion in opposition to PPBL follows a complete system audit report and subsequent compliance validation report of exterior auditors. RBI had stated that these studies revealed persistent non-compliances and continued materials supervisory issues in PPBL, warranting additional supervisory motion.

On March 11, 2022, RBI had barred PPBL from onboarding new clients with instant impact.

(This story has not been edited by News18 employees and is revealed from a syndicated information company feed – PTI)