Government gives approval to Paytm for investment in its payments division

Reuters reported that Paytm has received approval from a government panel responsible for overseeing investments related to China. Approval is connected to the investment of Rs 500 million (equivalent to USD 6 million) in a significant subsidiary. The choice will remove the main barrier for Paytm Payment Services to return to normal business operations. Still, it requires the approval of the finance minister.

Paytm Payment Services is one of the last major components of the fintech company's operations. Paytm's stock is experiencing a meltdown because the central bank has ordered Paytm Payments Bank, a distinct unit, to address ongoing non-compliance issues.

China's Ant Group owning a 9.88% stake in Paytm created a delay in approval by the government panel. Due to the increased monitoring of Chinese companies in India following the conflict at the Indo-China border.

In general, Paytm has been anticipating approval from the government panel for approximately two years. If it didn't have it, the company would have to close down its payment operations due to the current market conditions.

It is also awaiting approval for its payment aggregator license. Once approval is granted, it may obtain the license from the Reserve Bank.

In citing sources, Reuters stated that two individuals, including government sources, chose not to reveal their identities as the decision has not been officially made public.

According to a Paytm spokesperson cited by Reuters, the company abstains from commenting on market rumors. The spokesperson stated that we will adhere to our obligations under the SEBI Regulations by continuing to make disclosures and notifying the exchanges of any new material information to share.