Paytm Payments Services has received in-principle authorisation from the Reserve Bank of India to set up and operate a payment system for prepaid payment instruments in India. The approval, conveyed in a letter dated November 13, 2026, puts the Paytm wallet on course for a return once final authorisation follows.
The authorisation went to Paytm Payments Services Ltd, known as PPSL, a wholly owned subsidiary of One 97 Communications, which runs Paytm. It was granted under the Payment and Settlement Systems Act, 2007, and is subject to the central bank’s Master Directions on Prepaid Payment Instruments dated August 27, 2021.
The company disclosed the development in a stock exchange filing, a copy of which it said would be hosted on its investor relations page.
What Paytm must do before wallets return
The approval does not allow Paytm to start issuing wallets yet. PPSL can offer prepaid instruments, including wallets, only after it receives final authorisation or a Certificate of Authorisation from the Reserve Bank.
Post grant of Final Authorisation or Certificate of Authorisation, PPSL can offer prepaid instruments, such as wallet, to its customers.
One 97 Communications, in its exchange filing
Before that, PPSL must complete a system audit, including a cybersecurity audit, through an auditor empanelled with CERT-In or a qualified information systems auditor. The audit must cover the Reserve Bank’s Master Directions on Cyber Resilience and Digital Payment Security Controls for non-bank payment system operators, dated November 5, 2026.
The audit report must reach the Reserve Bank within six months of the letter. If it does not, the in-principle authorisation will lapse automatically and the central bank will not consider final authorisation.
A wallet Paytm lost nearly three years ago
The Paytm wallet was earlier run through Paytm Payments Bank. In March 2022 the Reserve Bank barred the bank from onboarding new customers, and on April 24, 2026 it cancelled the bank’s licence. This time the wallet will sit with PPSL instead.
PPSL applied for the authorisation on December 31, 2025. Paytm had already told investors in its first quarter earnings release for FY27 that the application was in, so the approval moves a stated plan forward rather than opening a new one.
The approval lands as Paytm turns steadily profitable
One 97 Communications reported a net profit of Rs 225 crore in the second quarter of FY27, up from Rs 21 crore a year earlier, on operating revenue of Rs 2,648 crore, up 28 percent year on year. It was the company’s sixth consecutive profitable quarter.
Paytm shares touched a 52-week high in Friday trading as investors reacted to the approval. The stock has been closing in on its IPO price through a run of profitable quarters.
A second tailwind is building. A proposed merchant discount rate of 40 basis points on UPI merchant transactions above Rs 2,000 could add a new revenue stream for payment companies, and Paytm expects its payment processing margin to expand by 2.5 basis points over the next two to three quarters.
What happens next is procedural but decisive. PPSL must appoint its auditor, complete the system and cybersecurity checks, and file the report inside six months. Only then can the Reserve Bank grant final authorisation and the Paytm wallet return to customers.
