Paytm Gets Nod From Govt To Invest: Report
The decision will eliminate the primary obstacle of Paytm Payment Services to the unit resuming regular commercial operations
Paytm has secured approval from a government panel that oversees investments linked to China, reported Reuters. Approval is related to investing Rs 500 million (USD 6 million) in a key subsidiary. The decision will eliminate the primary obstacle to the unit, Paytm Payment Services, resuming regular commercial operations. However, it still needs to be approved by the finance minister.
Paytm Payment Services is one of the biggest remaining parts of the fintech firm's business. A separate unit, Paytm Payments Bank, is facing problems by order of the central bank due to persistent non-compliance triggering a meltdown in Paytm's stock.
As China's Ant Group held a 9.88 per cent stake in Paytm, that caused an earlier bottleneck for approval by the government panel. Because India has intensified scrutiny of Chinese business after the stand-off between the two countries at the Indo-China border.
Overall Paytm has been waiting for the nod from the government panel for about two years. Without it, it would have to shut its payment business with an ongoing market scenario.
Its payment aggregator license is also pending. It may get the license from Reserve Bank, once the approval is given.
While citing sources, Reuters reported that two of whom are government sources, declined to be identified as the decision has not been formally announced.
Quoting a Paytm spokesperson, Reuters reported that the company does not comment on market speculation. "We will continue to make disclosures in compliance with our obligations under the SEBI Regulations, and will inform the exchanges when there is any new material information to share," the spokesperson said.
(With Reuters input)
