Chinese Money In Paytm's Payment Aggregator Arm? Govt Starts Investigation, Paytm Denies Allegations


Mohul Ghosh

Mohul Ghosh

Feb 12, 2024


An ongoing scrutiny is underway concerning foreign investments into Paytm Payments Services Ltd (PPSL), a subsidiary of One97 Communications Ltd, as reported by PTI. The focal point of this investigation lies in the flow of funds from China into the Indian company, amidst regulatory concerns and guidelines.

Chinese Money In Paytm? Govt Starts Investigation, Paytm Denies Allegations

The Reserve Bank of India’s denial of PPSL’s application to operate as a payment aggregator in November 2022 triggered a series of events. The apex bank mandated compliance with Press Note 3 under FDI rules, which led to One97 Communications Ltd seeking approval for altering the investment structure involving Chinese firm Ant Group Co.

This development underscores broader governmental efforts to monitor and regulate foreign investments, particularly from neighboring nations like China, in the wake of the COVID-19 pandemic. Stricter guidelines, such as Press Note 3, aim to prevent opportunistic takeovers of Indian firms.

In response, Paytm emphasized its adherence to regulatory protocols and clarified alterations in ownership structure that mitigated significant influence from the Chinese entity. As per information received from Paytm:

Paytm Payment Services Limited (PPSL) applied for an online Payment Aggregator (PA) license, but the regulator requested approvals for previous downward investments before resubmission, a standard procedure for FDI approval. PPSL received an extension to reapply, adhering to guidelines and submitting required documents. During the process, PPSL continued its online payment aggregation for existing partners, as per RBI’s guidelines. The company’s ownership structure has since changed, with the founder retaining the largest stake. Ant Financial’s stake in One 97 Communications Limited (OCL) reduced to below 10% in July 2023, altering beneficial ownership qualifications. Now, the founding promoter of One 97 Communications Ltd holds a 24.3% stake. All details are available in the public domain via regulatory filings.

However, the Reserve Bank’s recent measures against Paytm Payments Bank Ltd indicate broader concerns regarding compliance and supervision within the Paytm ecosystem.


Mohul Ghosh
Mohul Ghosh
  • 620 Posts

Subscribe Now!

Get latest news and views related to startups, tech and business

You Might Also Like

Business
Dec. 8, 2022

Beat The Burden Of Medical Inflation With A Health Insurance

As disease rates rise and medical technology develops, treatment costs climb. It’s essential to understand that medical costs are not exclusively associated with hospitals. The cost of prescription drugs, diagnostic procedures, ambulance and operating room fees, consultations with doctors, and other costs are also constantly increasing. All of them could put a big strain on […]

Business
Dec. 8, 2022

3 Biggest Changes Of iOS 16.2 Update That Every iPhone User Should Know!

In its latest update Apple said that it is preparing for the iOS 16.2 update for iPhones across the world. Notably, like the previous release, there are a couple of changes coming for the iPhones.  iOS 16.2 Update Release Date So far, Apple has not announced a release date for iOS 16.2 update. Reportedly, the […]

Business
Dec. 8, 2022

300 Microsoft Employees Create Employee Union, First Time Ever: This Is How Microsoft Reacted

Around 300 workers at Microsoft Corp.’s ZeniMax Studios have commenced the process of forming a union which is said to be the first at the software giant in the US.  Here, Microsoft Corp.’s ZeniMax Studios known for popular video games including Skyrim and Fallout. Forming Union In Microsoft Corp Moreover, the quality assurance employees at […]

Business
Dec. 7, 2022

India Beats China In Air Travel Safety: Ranking Jumps From 102 To 48 In Global Aviation Safety

India’s air safety protocols and executions have improved drastically over the years, as validated by the findings of a specialized agency of the United Nations, the International Civil Aviation Organization or ICAO. The UN watchdog has upgraded India’s ranking in terms of aviation safety to the 48th position, jumping past the rankings of countries like […]

Recent Posts

Related Videos

   

Subscribe Now!

Get latest news and views related to startups, tech and business

who's online