In its filing, Paytm said that Paytm Payments Services Limited (PPSL), a 100% subsidiary of the payments major, has received a letter from the RBI, informing it about the next steps to receive the licence.
The fintech states that the RBI has not rejected its application, but have simply asked it to reapply in 120 days. The company is taking all the necessary steps and is hopeful of getting the required approvals soon. Paytm is supposed to submit documents and get the necessary approval for past downward investment into PPSL to comply with FDI guidelines.
The company said that the services would remain unaffected for its existing online merchants, and the rejection will not have any material impact on its business for now. It can continue to onboard new offline merchants and offer them payment services, including All-in-One QR, Soundbox, Card Machines, etc.
The company’s most recent performance update shows its increasing market share in the digital lending ecosystem. Paytm disbursed 3 million loans worth USD 374737 in October 2022, capping off one of the strongest month for its lending business in 2022 so far.
It also reported 84 million monthly transacting users (MTU) in October 2022, an increase of 33% year-on-year (YoY). The increase in MTU saw Paytm’s gross merchandise value (GMV) rise 42% YoY to reach USD 14.4 billion from USD 10 billion in 2021.
However, it did not have a profitable second quarter (Q2). The fintech’s net loss widened 21% YoY to USD 70 million in the second quarter of FY23. Paytm’s revenue from operations rose 76% to USD 234 million from USD 133 million in Q2 FY22. The company’s expenses increased 60.4% in Q2 FY22 to USD 314 million during the quarter that ended on September 30, 2022.
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