Paytm Payments Services, the payments arm of One 97 Communications, has received preliminary approval from the Reserve Bank of India (RBI) to issue prepaid payment instruments (PPIs), including digital wallets. The approval creates a regulatory route for Paytm to rebuild its wallet business outside Paytm Payments Bank, but it does not allow the company to begin offering the products immediately.
Paytm said in a regulatory filing that its wholly owned subsidiary will need the RBI’s final authorisation before launching prepaid payment products for customers. Until that approval is granted, users should not interpret the preliminary clearance as the return of wallet top-ups or other previously available wallet services.
What the preliminary approval changes
PPIs are payment products that hold stored value for transactions. The category includes digital wallets and other prepaid instruments. With the preliminary approval, Paytm Payments Services can move ahead with the authorisation process needed to offer such products independently, rather than relying on the banking entity that previously supported Paytm’s wallet operations.
| Development | Status |
|---|---|
| Entity seeking approval | Paytm Payments Services |
| Regulator | Reserve Bank of India |
| Products covered | Prepaid payment instruments, including digital wallets |
| Current position | Preliminary approval granted; final authorisation pending |
The development follows a prolonged regulatory setback for Paytm Payments Bank. In January 2024, the RBI imposed restrictions on the bank, citing persistent non-compliance and supervisory concerns. The measures stopped it from accepting fresh deposits, credit transactions and top-ups in customer accounts, prepaid instruments, wallets and other specified products. Since Paytm’s wallet activity had operated through Paytm Payments Bank, those restrictions disrupted regular wallet operations.
The RBI later cancelled Paytm Payments Bank’s banking licence earlier in 2026, adding to the separation between Paytm’s consumer payments business and its former banking operations. The latest preliminary approval therefore represents a move towards a different structure for prepaid payment services. It is not, however, a restoration of Paytm Payments Bank or a confirmation that the bank’s earlier services will return in their previous form.
What Paytm users should expect
For customers, the immediate consequence is limited: no new Paytm wallet or PPI service can start until final RBI approval is secured. The company will still have to complete the central bank’s authorisation process and meet the applicable regulatory requirements before products are offered to the public.
- The preliminary clearance applies to Paytm Payments Services, not to the discontinued banking operations of Paytm Payments Bank.
- Digital wallets are included within the prepaid payment products covered by the approval.
- Customer access will depend on the RBI granting final authorisation.
If final approval is obtained, Paytm Payments Services could offer prepaid products through a separate payments-services framework. The company’s filing, however, does not establish a launch date, the precise wallet features, revised customer terms or the availability of any particular product. Those details will depend on the final regulatory clearance and Paytm’s subsequent announcements.
