As the government champions fintech initiatives, we at Paytm are dedicated to providing our users with an uninterrupted payment experience. By pioneering mobile payments, QR technology and Soundbox devices, we have extended financial services beyond traditional urban centers to reach deep into the rural heartlands of India. The government’s consistent backing of fintech innovations has empowered Indian firms to compete globally and spearhead technological progress. Their support ensures seamless payment services for SMEs, upholding trust and fostering digital expansion for businesses and consumers.
Recent articles have speculated on the deferral of Paytm Payment Services Limited’s (PPSL) license application and potential penalties. We wish to clarify that we have not received any communication suggesting a deferral or penalties. Any notion to the contrary is completely unfounded and misleading.
“The source-based information appears speculative, as the government has consistently championed fintech initiatives. The ongoing application process has seen us promptly provide the requested information, with no indication of rejection or penalties involved. Aligning with the government’s vision, supporting Paytm as a homegrown entity is pivotal for empowering Indian companies to compete globally and drive technological advancements. Their backing ensures seamless payment services for SMEs, preserving trust and fostering digital growth for businesses and consumers. Paytm, an Indian company founded by an Indian citizen, with our Founder CEO as the largest shareholder and sole SBO (Significant Beneficial Owner) of One 97 Communications Limited (OCL), underscores its commitment to indigenous entrepreneurship and innovation. All KMPs (Key Managerial Personnel) and Board members of OCL are of Indian origin, with Antfin having no Board representation or special rights. As clarified, the formation of PPSL, transfer of online payments business, and the investment of Rs 500 million were undertaken to comply with RBI’s regulations.“
Paytm Spokesperson
Addressing Recent Concerns
Formation of Paytm Payment Services Limited (PPSL): PPSL is a wholly-owned subsidiary of One 97 Communications Ltd (OCL), and it applied for an online Payment Aggregator (PA) license for online merchants. The formation of PPSL, transfer of online payments business from OCL to PPSL and investment of capital in PPSL was required by RBI’s guidelines, which mandated that the PA business should be housed in an independent legal entity. Without such a requirement, the online payments business would have continued in OCL itself.
Regulatory Requirements and Capital Investment: The regulator subsequently requested PPSL to obtain necessary approvals for the investment of INR 500 million in PPSL and resubmit the application. To clarify, the investment of Rs 500 million was made from the OCL’s existing cash reserves and no Chinese capital was raised by OCL after the introduction of Press Note 3 of 2020. Further to add, the Rs 500 million was the capital required to comply with RBI’s minimum net worth rules and fund the cash requirements of PPSL. Please see point 4 here: https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11822&Mode=0
Extension and Operational Continuity: As per our stock exchange filing dated March 26, 2023, the regulator granted PPSL an extension and requested a resubmission, to which PPSL complied promptly. During the pending process, PPSL was allowed to continue with its online payment aggregation business for existing partners without onboarding any new merchants.
Regarding ownership: Our Founder CEO remains the single-largest shareholder of OCL with an aggregate shareholding of 19.4%, including shares held by his wholly-owned companies. Ant Financial reduced its stake in OCL to less than 10% in August 2023.
We uphold the highest standards of compliance and transparency. Our commitment extends beyond meeting regulatory requirements to enhancing the robustness and reliability of our services, thus positively contributing to India’s digital payment ecosystem. We deeply value the trust you place in us and are excited to continue providing reliable, secure, and innovative digital payment solutions to millions across India.
