Paytm crisis: Govt panel examining Chinese FDI flow into Paytm Payments Services, says report
foreign direct investment (FDI) from China in Paytm Payments Services Ltd (PPSL), a subsidiary of Paytm parent One97 Communications Ltd, PTI reported citing sources. Paytm Payments Services applied for a licence with the Reserve Bank in November 2020 to operate as a payment aggregator under the guidelines on Regulation of Payment Aggregators and Payment Gateways. However, the apex bank rejected PPSL's application in November 2022.
The RBI asked the company to resubmit it to comply with Press Note 3 under FDI rules. One97 Communications Ltd (OCL), the parent company of Paytm Payments Services Ltd has investment from Chinese firm Ant Group Co. Consequently, on December 14, 2022 the OCL applied to the Indian Government for past downward investment from OCL into the PPSL to comply with Press Note 3 prescribed under FDI guidelines.
The report said an inter-ministerial committee is examining investments from China in PPSL and a decision would be taken on the FDI issue after due consideration and comprehensive examination, citing sources. It is important to note that under Press Note 3 the government mandates prior approval for foreign investments from countries that share land borders with India to curb opportunistic takeovers of domestic firms following the COVID-19 pandemic. Countries sharing land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.
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