Preliminary regulatory clearance paves way for digital wallet revival

Regulators have granted initial clearance to One 97 Communications to operate digital wallets through its wholly owned subsidiary. Paytm Payments Services Ltd received this preliminary nod from the Reserve Bank of India on November 13. This development marks a critical step toward reviving the popular payment ecosystem following earlier regulatory restrictions. Final operational launch remains contingent upon further strict compliance. Regulators mandated that the company cannot immediately issue prepaid payment instruments or digital wallets to consumers. Market operations can only commence after the subsidiary secures a definitive Certificate of Authorisation from the central banking authority.

Security audits and deadlines

Before granting final permission, regulators require a rigorous cyber security evaluation conducted by a qualified information systems auditor empaneled with CERT-In. Officials gave the firm exactly six months to complete this mandatory system audit, which focuses heavily on digital payment security controls. Failure to submit the required documentation within this specific time frame will cause the preliminary clearance to lapse automatically. If the preliminary status expires, regulators will not consider granting subsequent operational permissions. Furthermore, any future changes in corporate shareholding must rigorously follow established regulatory guidelines.

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Market response and background

Investors reacted positively to the regulatory breakthrough on the stock exchanges. Shares of One 97 Communications surged on Friday, touching a fresh 52-week high of Rs 1,958.80 before closing up at Rs 1,945. Financial markets viewed this step as crucial for the brand's long-term recovery in the financial services sector. This progression comes after the central bank imposed severe restrictions on Paytm Payments Bank. Regulators ultimately canceled that banking license on April 24, 2026, citing significant supervisory concerns. Rebuilding through a separate subsidiary offers the fintech firm a fresh operational slate in India's digital economy.