Paytm has moved a step closer to reviving its digital wallet after the Reserve Bank of India (RBI) granted preliminary approval to its payments services subsidiary to issue prepaid payment instruments (PPIs), including digital wallets, Reuters reported on Friday, November 13.

Source: Reuters via The Hindu BusinessLine

Paytm Payments Services Ltd (PPSL), a wholly owned subsidiary of One 97 Communications, received an RBI letter dated November 13, 2026 granting in-principle authorisation under the Payment and Settlement Systems Act, 2007 to set up and operate a payment system for issuing and operating PPIs in India, the company disclosed in a stock exchange filing.

Source: Livemint

Wallets cannot restart yet

The approval does not mean customers can immediately load money into Paytm Wallet. PPSL must first complete a system audit, including a cybersecurity audit, through an eligible auditor — a CERT-In empanelled auditor, a CISA registered with ISACA, or a DISA holder from the Institute of Chartered Accountants of India — and submit the report to the RBI within six months from November 13. If it fails to do so, the in-principle authorisation will automatically lapse.

PPSL can begin issuing PPIs to customers only after receiving the final authorisation, or Certificate of Authorisation, from the RBI. The company had earlier said in its Q1 FY27 earnings release that PPSL had applied for a wallet licence.

Why this matters

The latest approval provides a separate regulatory route for Paytm to rebuild its wallet business through PPSL rather than through its former banking arm. The RBI had earlier barred Paytm Payments Bank from accepting fresh deposits and wallet top-ups over persistent regulatory non-compliance and supervisory concerns, and earlier this year it cancelled Paytm Payments Bank's banking licence.