- Paytm refutes Reuters report claiming government deferred approval of its investment in Paytm Payment Services arm.
- Paytm asserts compliance with RBI regulations and emphasizes its commitment to empowering Indian companies.
- Government scrutiny on foreign investment in Paytm Payments Services Ltd (PPSL) due to FDI rules and border security concerns.
Paytm has rebutted claims made in a Reuters report suggesting that the government deferred approval of its Rs 50 crore investment in its Paytm Payment Services arm. In a blog post, Paytm clarified that it has not received any communication regarding the delay from the government. The investment pertains to compliance with RBI regulations and aims to bolster the company’s payment services subsidiary amid ongoing scrutiny over foreign investments.
The controversy arises from concerns over Chinese shareholding in Paytm’s parent company, One97 Communications Ltd, which owns Paytm Payment Services. Despite Ministry of Home Affairs’ approval in January, the Foreign Ministry reportedly declined the investment on political grounds, as per the Reuters report. However, Paytm asserts that all key personnel and board members are Indian, with the investment undertaken to comply with RBI regulations, not due to Chinese influence.
The delay in government approval could impact Paytm’s plans for its payment services arm, which has faced regulatory challenges in the past. With FDI rules and border security concerns shaping government scrutiny, Paytm navigates a complex landscape where regulatory compliance and national security interests intersect, highlighting the broader implications of foreign investment in India’s digital economy.
