Government Examines Chinese Investments in Paytm’s Payment Aggregator Subsidiary | India Business News

Feb 11, 2024

New Delhi: A few days after the Reserve Bank of India (reserve Bank of India) big action on Paytm's Payments BankSources said on Sunday that the government is now investigating foreign direct investment from China fintech companyPayment aggregator subsidiary of.
According to a PTI report, the government is examining Chinese investment in Paytm Payments Services Ltd (PPSL), which had applied for a license with the RBI to operate as a payment aggregator.
PPSL is part of One97 Communications Limited, which owns Paytm. Chinese firm Ant Group Company has an investment in One97 Communications Limited (OCL).
The report said PPSL had applied for the license in November 2020 under the guidelines on regulation of payment aggregators and payment gateways.
However, in November 2022, the apex bank rejected the application and asked the company to resubmit it, so as to comply with Press Note 3 under FDI rules.
In December 2022, the company filed an application with the government for the previous downward investment in the company from OCL to comply with Press Note 3 prescribed under the FDI guidelines.
Sources said an inter-ministerial committee is now examining investment from China in PPSL and a decision on the FDI issue will be taken after due consideration and comprehensive examination.
Under Press Note 3, the government had made its prior approval mandatory for foreign investment in any sector from countries sharing land borders with India to prevent opportunistic takeover of domestic companies following the COVID-19 pandemic.
The countries sharing land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.
Last month, in a major blow to the company, RBI had barred Paytm Payments Bank Ltd (PPBL) from accepting deposits or top-ups in any customer accounts, prepaid instruments, wallets and FASTags after February 29, 2024 .
The Reserve Bank's action against PPBL follows a comprehensive system audit report and compliance verification report from external auditors.
RBI had said that these reports revealed persistent non-compliance and continuing material supervisory concerns at PPBL, necessitating further supervisory action.
On March 11, 2022, RBI had barred PPBL from adding new customers with immediate effect.

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