Government Evaluates Chinese Foreign Direct Investment in Paytm Payments Services

12 Feb 2024 , 10:58 AM

According to PTI, the Centre is looking into foreign direct investment (FDI) from China in Paytm Payments Services Ltd (PPSL), a payment aggregator subsidiary of One97 Communications Ltd (OCL).

PPSL requested for a payment aggregator license from the Reserve Bank of India (RBI) in November 2020, in accordance with the Payment Aggregators and Payment Gateways Regulation Guidelines.

However, in November 2022, the RBI rejected PPSL’s proposal and directed the business to resubmit it in accordance with Press Note 3 under FDI guidelines. Notably, OCL has received funding from Chinese enterprise Ant Group Co.

Following the banking regulator’s direction, the business submitted the required application to the Centre on December 14, 2022, about OCL’s previous downward investment in PPSL, with the goal of adhering to Press Note 3 contained in FDI standards.

An inter-ministerial committee is now reviewing Chinese investments in PPSL. According to the news agency, a judgement on the FDI topic would be made after careful analysis and examination of all relevant factors.

According to Press Note 3, the government requires prior clearance for foreign investment in any industry from countries that share a land border with India. This regulation seeks to reduce the likelihood of opportunistic takeovers of local enterprises in the wake of the Covid-19 outbreak.

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