Paytm has taken an important step towards bringing back its digital wallet services after the Reserve Bank of India (RBI) granted preliminary authorisation to its wholly owned subsidiary, Paytm Payments Services Limited (PPSL), on November 13, 2026. The development raises hopes of a possible return of Paytm Wallet, although customers will have to wait before the service becomes available again.
The approval was disclosed by Paytm’s parent company, One 97 Communications Limited, through a regulatory filing to the stock exchanges. The RBI’s in-principle authorisation allows PPSL to establish and operate a payment system for issuing Prepaid Payment Instruments (PPIs), a category that includes digital wallets.
However, this is not the final licence required to begin issuing prepaid instruments. PPSL must fulfil the regulator’s conditions and obtain a final Certificate of Authorisation before it can start offering wallet services to customers.
What Does the RBI’s In-Principle Approval Mean?
The preliminary authorisation marks a significant development in Paytm’s efforts to re-enter the prepaid payment instrument segment. It allows PPSL to move forward with the regulatory process for operating a PPI payment system under the Payment and Settlement Systems Act, 2007.
The approval is subject to compliance with the RBI’s Master Directions on Prepaid Payment Instruments, originally issued on August 27, 2021, along with subsequent amendments and regulatory requirements.
For Paytm, the proposed arrangement could enable its payments services subsidiary to operate the wallet business independently of Paytm Payments Bank, which previously housed the service. It may also provide the company with an opportunity to expand its prepaid payment offerings in the future.
Why Did Paytm Wallet Services Face Restrictions?
Paytm’s wallet business was affected by regulatory action involving Paytm Payments Bank. The RBI had imposed restrictions on the bank over supervisory and compliance concerns, including limits on accepting deposits, credits and wallet top-ups.
These developments disrupted several services associated with the payments bank and created uncertainty around the future of Paytm’s wallet operations.
The latest in-principle approval is therefore an important step towards establishing a separate regulatory route for the wallet business through PPSL. However, it does not automatically restore services that were previously restricted or make the wallet available immediately.
System and Cybersecurity Audit Is Mandatory
The RBI has also laid down compliance requirements that PPSL must fulfil before moving to the final authorisation stage. One important condition is a system audit that must include a cybersecurity assessment.
The audit must be conducted by an eligible auditor, such as a CERT-In-empanelled auditor or a qualified information systems auditor. PPSL is required to submit the System Audit Report to the RBI within six months from the date of the regulator’s letter.
Failure to submit the report within the stipulated period could result in the in-principle authorisation lapsing automatically. The company must also follow applicable RBI requirements relating to changes in ownership or shareholding.
When Can Customers Use Paytm Wallet Again?
Paytm users should not assume that wallet services will resume immediately following the announcement. The November 13 approval is only an initial regulatory clearance, and PPSL still needs to secure the final authorisation, also referred to as the Certificate of Authorisation.
Only after receiving this final approval can the subsidiary begin issuing prepaid payment instruments, including digital wallets, to customers.
For now, users should wait for an official announcement from Paytm regarding the launch timeline. The RBI’s decision is a positive step for the company, but the actual return of Paytm Wallet will depend on the completion of regulatory formalities and the grant of final permission.
