Almost three years after the regulator's crackdown switched off the Paytm Wallet, India's best-known fintech has its first green light to bring it back, and its shares briefly climbed past their 2021 listing price.
The Reserve Bank of India has granted in-principle authorisation to Paytm Payments Services Ltd (PPSL), a wholly owned subsidiary of Paytm parent One 97 Communications, to set up and operate a system for issuing prepaid payment instruments (PPIs), including digital wallets, according to The Indian Express. The company disclosed the RBI letter, dated November 13, in a stock exchange filing on Friday. The approval comes with strict conditions, and wallets cannot go live until Paytm secures final authorisation.
What the RBI has actually approved
The authorisation was granted under the Payment and Settlement Systems Act, 2007, and is subject to the RBI's Master Directions on Prepaid Payment Instruments, The Indian Express reported. In plain terms, it is a preliminary licence: PPSL can only begin issuing wallets and other prepaid instruments after it receives a final Certificate of Authorisation from the central bank.
To get there, PPSL must complete a system audit that includes a cybersecurity audit. Under the conditions described in the company's filing, that audit must be done by an auditor empanelled with CERT-In, an ISACA-registered Certified Information Systems Auditor, or a holder of the ICAI's Diploma in Information System Audit, according to Mint. It must cover the RBI's new cyber-resilience directions for non-bank payment operators, issued on November 5, 2026, and Paytm must also comply with the 2018 rules on local storage of payment data.
The clock is tight. PPSL has six months from the date of the letter to submit the audit report. If it misses that deadline, the in-principle authorisation lapses automatically and the RBI will not consider final approval afterwards. The regulator also told the company that any change in shareholding or control must follow its 2022 rules requiring prior approval for such moves.
Shares touch their listing price for the first time
Investors cheered the news, if cautiously. One 97 Communications shares hit an intraday high of ₹1,960 on Friday, crossing their November 2021 listing price of ₹1,950 for the first time in nearly five years, according to Moneycontrol. The rally faded later in the session. Moneycontrol put the close at ₹1,934, up 0.5%, while The Indian Express reported a close of ₹1,945, up 1.14% (the two outlets' figures differ slightly).
Either way, the stock is still below its IPO issue price of ₹2,150. It has, however, rallied about 50% so far in 2026, far outpacing the Nifty 50, which is down 3.9% this year, and the company's market value stands at roughly ₹1.24 lakh crore, Moneycontrol said.
How Paytm lost its wallet
The wallet was once central to Paytm's consumer business, but it was run through Paytm Payments Bank Ltd (PPBL). The RBI acted against that bank over persistent regulatory non-compliance, weak systems and controls, and serious supervisory concerns, culminating in sweeping restrictions announced on January 31, 2024, The Indian Express reported. The central bank then cancelled PPBL's banking licence on April 24, 2026.
Friday's approval gives Paytm a separate route to rebuild the wallet through PPSL, rather than through its former banking arm. PPSL already holds an online payment aggregator licence, granted in August 2025, but that only covers processing payments for merchants. A PPI licence is different because it lets the company hold customer balances in wallets and cards, Mint explained.
A stronger company asking for a second chance
The approval arrives as Paytm's finances look healthier. For the July to September quarter, the company reported net profit of ₹226 crore, up from ₹21 crore a year earlier, on revenue that rose 28.5% to ₹2,648 crore, Moneycontrol reported. EBITDA nearly doubled to ₹270 crore.
Brokerages have been broadly positive. Bernstein has an Outperform rating with a ₹2,200 target, Jefferies a Buy with ₹2,150, Citi raised its target to ₹1,940, and Goldman Sachs kept a Buy while trimming its target to ₹2,010. Goldman had earlier flagged a wallet relaunch as a potential extra source of earnings, according to Moneycontrol.
What happens next for users
Customers should not expect to load money into a Paytm Wallet just yet. The company has not announced a launch date, transaction limits or features, Mint noted, and submitting the audit does not guarantee final approval. If the RBI does sign off, Paytm could offer both small, minimum-detail wallets for purchases and full-KYC wallets that allow transfers and can be linked to UPI, under the regulator's existing PPI framework.
The real test is the next six months. Paytm has to show a regulator that once shut down its banking arm that its systems and controls are now up to standard. Pass that audit, and one of India's most familiar digital payment brands gets its wallet back. Miss it, and the door closes again.