The Reserve Bank of India (RBI) has asked Paytm Payments Services Limited to resubmit the application to operate as payment aggregator. One97 Communications (OCL), which owns the Paytm brand, had proposed to transfer the payment aggregator services business undertaken by it to Paytm Payments Services (PPSL) in December 2020 to comply with payment aggregator (PA) guidelines of the RBI, but the banking regulator had rejected its application.
The company re-submitted the required documents in September 2021.
As per the letter, PPSL is required to take the following steps and resubmit the PA application within 120 calendar days:
1. Seek necessary approval for past downward investment from the Company into PPSL, to comply with FDI Guidelines
2. Not onboard new online merchants
The firm said that it is hopeful of receiving the necessary approvals in a timely manner and resubmitting the application. PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own.
According to RBI’s PAs guidelines, a single entity cannot continue to provide an e-commerce marketplace along with payment aggregator services and such payment aggregator services must be separated from the e-commerce marketplace business.