Paytm Seeks RBI Approval to Revive Wallet Business With Fresh PPI Licence

One97 Communications has made an application to the Reserve Bank of India (RBI) for a Prepaid Payment Instrument (PPI) license. If approved, the licence will allow the company to relaunch wallet services directly under One97 Communications after the closure of Paytm Payments Bank.

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The application comes after Paytm’s wallet business was disrupted following regulatory action against Paytm Payments Bank. While the company continued offering Unified Payments Interface (UPI) services through partner banks, it lost the ability to operate wallet services through its banking subsidiary.

The proposed PPI licence would enable One97 Communications to independently issue prepaid payment instruments and expand its digital payment offerings beyond UPI-based services.

What a PPI Licence Allows

A PPI licence authorises eligible entities to issue prepaid payment products, including digital wallets, within the RBI’s regulatory framework.

If the application is approved, users will be able to load funds into a Paytm wallet and use the balance for merchant payments, utility bill settlements and other eligible digital transactions. Unlike bank accounts, prepaid wallets store funds deposited by users in advance for future payments.

The licence would allow the company to offer wallet services directly instead of depending on a payments bank structure.

Background to the Application

Paytm Payments Bank had been under regulatory scrutiny for compliance-related issues over the past few years. Restrictions on onboarding new customers were followed by tighter supervisory measures.

In April 2026, the RBI revoked the licence of the bank, due to non-compliance with licensing conditions. During this period, the regulator said that the payments bank had enough liquidity to return deposits in the course of liquidation.

After the decision, One97 Communications concentrated on uninterrupted payment service with the participation of several banks, which enabled both users and sellers to use UPI without interruptions.

Focus on Diversification of Payments

This licence can restore one of the main components of Paytm’s payments business, a wallet on its platform. Along with UPI, a digital wallet would provide users with an additional payment option and could strengthen the company’s merchant ecosystem.

According to the company, consumers benefit from having multiple payment choices, and wallet services would complement its existing offerings. The RBI will review the application before taking a decision on the licence. Until then, Paytm will continue operating its payment services through partner banks while awaiting regulatory approval.