Paytm Parent One97 Wins RBI In-Principle Wallet Nod with Six-Month Audit Clock

The regulatory freeze has thawed, but the clock is ticking.

One97 Communications, the parent company of fintech major Paytm, announced on Friday, November 13, that wholly owned subsidiary Paytm Payments Services Limited (PPSL) received in-principle authorization from the Reserve Bank of India (RBI) to set up and operate a payment system for prepaid payment instruments (PPIs).

The clearance, granted under the Payment and Settlement Systems Act, 2007, clears a route for PPSL to revive its flagship digital wallet operations. Yet the approval carries strict operational guardrails. PPSL cannot issue a single wallet today.

Under central bank rules, commercial issuance can launch only after the banking regulator inspects compliance records and hands down a final Certificate of Authorisation.

Market Context: The in-principle nod marks an operational turning point for Paytm, which first disclosed PPSL's formal wallet application during its Q1 FY27 earnings release as part of a restructuring of its payments stack.

The Six-Month Compliance Clock

The central bank attached stringent conditions to the provisional clearance.

PPSL must conduct an exhaustive system and cybersecurity audit through an eligible external auditor. The review must measure systems against the RBI’s November 5 regulatory framework on cyber resilience and digital payment security controls for non-bank payment system operators.

The regulatory timeline leaves zero margin for slippage.

PPSL has exactly six months from receipt of the November 13 authorization letter to complete tests and deliver the final system audit report to AirNews Street. Should the subsidiary miss the 180-day window, the in-principle authorization lapses automatically. The RBI warned it will refuse to consider granting final operating clearance if that deadline passes.

Data Localization and Ownership Controls

Beyond technical stress tests, the banking regulator placed PPSL under binding corporate governance and infrastructure mandates.

The subsidiary must adhere strictly to RBI directions governing domestic payment data storage, ensuring complete local retention of transaction details. Furthermore, PPSL must obtain prior central bank clearance before executing any changes to its shareholding structure or corporate ownership—curbing sudden equity shifts.

For One97 Communications, the provisional green light initiates a sprint toward regulatory compliance before PPSL can reclaim its digital wallet footprint in India's competitive retail payments ecosystem.