On Saturday, Paytm informed the stock exchanges that the Reserve Bank of India (RBI) has asked its subsidiary — Paytm Payment Services Ltd (PPSL) — not to onboard new online merchants.
This move came as a retaliation to an application the company had filed for a payment aggregators license.
In a letter, the Reserve Bank of India has ordered the company to seek required approval for past downward investments from Paytm to the company to comply with FDI guidelines.
After abiding by the two steps prescribed by the regulator, PPSL can apply for a payment aggregators license in the next 120 days.
Paytm said in the exchange notification, “This has no material impact on our business and revenues, since the communication from RBI is applicable only to onboarding of new online merchants.”
The company said in a statement,
“We can continue to onboard new offline merchants and offer them payment services including All-in-One QR, Soundbox, Card Machines, etc.”
Also, in the mean time, PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected.