India Banking Regulator Asks Paytm Unit to Reapply for License

(Bloomberg) — India’s banking regulator requested a unit of Paytm to resubmit its utility for approval required to supply fee aggregator providers, a probably profitable enterprise the corporate is making an attempt to develop into.

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The Reserve Financial institution of India requested Paytm Funds Service Ltd. to resubmit its utility after looking for mandatory approvals from its guardian to adjust to overseas direct funding pointers, the fintech firm stated in a disclosure to inventory exchanges on Saturday.

Paytm, backed by SoftBank Group Corp. and Ant Group Co., is increasing its product providing in a bid to persuade traders of its earnings potential at the same time as losses mount. Its inventory has misplaced three-quarters of its worth since Paytm’s preliminary public providing a 12 months in the past — the worst first-year decline amongst giant IPOs globally over the previous decade.

Fee aggregators are platforms offering various funds choices to clients akin to retailers. They want a license from the Reserve Financial institution of India to function.

PPSL, a 100% subsidiary of Paytm guardian One97 Communication Ltd., was additionally requested by RBI to not onboard new on-line retailers as clients. Paytm can nonetheless maintain including offline retailers as customers.

“This has no materials impression on our enterprise and revenues, because the communication from RBI is relevant solely to onboarding of latest on-line retailers,” Paytm stated. “We’re hopeful of receiving the mandatory approvals in a well timed method and resubmitting the applying.”

PPSL has to resubmit the applying in 120 days.

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