Paytm Secures RBI Approval After Key Investor Exit

Paytm, a leading Indian fintech company, has received in-principle approval from the Reserve Bank of India (RBI) to operate as an online payment aggregator, allowing it to handle transactions directly for merchants across cards, net banking, and the Unified Payments Interface (UPI). This regulatory milestone comes more than two years after the RBI initially denied Paytm the license in 2022 due to concerns over foreign investment rules related to neighboring countries. The approval coincides with the complete exit of China's Ant Group, which sold its remaining 5.8% stake in Paytm, a move seen as easing regulatory hurdles. Until now, Paytm had to rely on partnerships with banks such as Axis, HDFC, State Bank of India, and Yes Bank to facilitate online payments and onboarding of new merchants was restricted. The RBI's approval removes these onboarding restrictions but requires Paytm to complete a system and cybersecurity audit within six months to maintain the license. Despite these gains, Paytm remains behind competitors like PhonePe and Google Pay in UPI market share, holding under 7% of transaction volumes as of June 2025.