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One 97 Communications announced that its wholly owned subsidiary, Paytm Payments Services (PPSL), is in receipt of a letter from Reserve Bank of India (RBI) in response to an application from PPSL for the authorization to provide payment aggregator services (PA application) for online merchants.
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 in to PPSL, to comply with FDI Guidelines
2. Not onboard new online merchants
There are no material observations other than what is mentioned above. This has no material impact on the company's business and revenues, since the communication from RBI is applicable only to onboarding of new
online merchants.
The company can continue to onboard new offline merchants and offer them payment services including All-in-One QR, Soundbox, Card Machines, etc.
Similarly, PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected.
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