Paytm to create new company for online payments in line with RBI guidelines

By

Isabelle Crossley

Published
Sep 1, 2021

Digital payments and e-commerce business Paytm will create a new subsidiary named Paytm Payments Services Limited to run its payment aggregator business to follow a directive by the Reserve Bank of India.

 
The business has formulated the plan for this new company and is in the process of seeking approval from its shareholders for its official creation, TNN reported. The business will hold an Extraordinary General Meeting on September 23 to discuss the matter. The new company would also run Paytm’s online payments gateway, one of its main business operations.
 
The Reserve Bank of India had originally introduced its new guidelines on March 17, 2020. The regulations were designed to regulate Payment Aggregator businesses and stated that such businesses must be regulated and run by a separate company and must obtain a license from the Reserve Bank of India.

Paytm is run by parent company One97 Communications. The business is in the process of gearing up for its initial public offering, which is valued at around Rs 16,600 crore ($2.23 billion). The business filed its official papers for the IPO in July and plans to use the funds from the IPO to strengthen its payments ecosystem.