Paytm Parent One 97 Communications Surges to Record High of Rs 1,960 on Preliminary RBI Nod for Wallet Licence

Shares of One 97 Communications Limited, the parent company of Paytm, rallied to a record high of Rs 1,960 on Friday after the company announced that its wholly owned subsidiary, Paytm Payments Services Limited (PPSL), has received in-principle authorisation from the Reserve Bank of India (RBI) to issue and operate prepaid payment instruments (PPIs), including digital wallets.

The regulatory nod, granted under the Payment and Settlement Systems Act, 2007, represents a critical breakthrough for Paytm as it seeks to rebuild its consumer payments architecture after extensive regulatory restructuring over the past two years.

Regulatory Roadmap to Final Launch

The in-principle authorisation does not permit PPSL to roll out digital wallet services immediately. To commence commercial operations, the unit must fulfill specific compliance benchmarks outlined in the central bank's Master Directions on Prepaid Payment Instruments:

• PPSL is required to conduct comprehensive technical evaluations, including a system and cybersecurity audit by an empaneled auditor.
• The audit report must be submitted to the RBI within six months, failing which the in-principle authorisation will lapse.
• The company can only issue PPI products once the RBI grants a final Certificate of Authorisation (CoA).

Paytm had formally initiated the process to secure an independent PPI licence through PPSL in July 2026, a move disclosed in its Q1 FY2027 earnings release, aiming to restore completeness to its payments ecosystem.

Moving Past the Payments Bank Disruption

Digital wallets were originally the cornerstone of Paytm's consumer payments stack, operated under Paytm Payments Bank Limited (PPBL). However, the central bank placed severe operational restrictions on PPBL in early 2024 over persistent supervisory and compliance issues, prohibiting fresh top-ups and balance additions before cancelling the payments bank's banking licence in April 2026.

By housing the wallet franchise under PPSL—which operates strictly as a payment system provider rather than a deposit-taking bank—One 97 Communications has decoupled its wallet offering from the legacy banking arm, satisfying regulatory separation standards.

Market Reaction and Investor Implications

Market response to the development was swift and overwhelmingly positive on domestic bourses. Paytm's stock saw aggressive buying, climbing to touch an all-time high of Rs 1,960 on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Analysts tracking the payments sector noted that regaining wallet capabilities will allow Paytm to rebuild user stickiness, improve transaction velocity, and support higher-margin merchant payment solutions. While Unified Payments Interface (UPI) flows remain the dominant payment method in India, closed- and semi-closed digital wallets offer superior retention and checkout conversion rates for transit, bill payments, and small-ticket merchant transactions.