Government Examines Chinese Investment in Paytm Payments
By siliconindia | Monday, 12 February 2024, 08:41:03 AM IST
The Indian government is currently examining the foreign direct investment (FDI) from China in Paytm Payments Services Ltd (PPSL), the payment aggregator subsidiary of One97 Communications Ltd. Sources reveal that an inter-ministerial committee is assessing investments made by Chinese firm Ant Group Co. in One97 Communications Ltd.
PPSL's initial application for a payment aggregator license with the Reserve Bank of India (RBI) was rejected in November 2022, prompting One97 Communications Ltd to file a new application on December 14, 2022. The application seeks approval for past downward investment from Ant Group Co., aligning with regulations outlined in Press Note 3 under FDI rules.
Press Note 3 mandates prior government approval for foreign investments from countries sharing a land border with India to prevent opportunistic takeovers of domestic firms, especially post-COVID-19. The countries affected include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
A Paytm spokesperson stated that the company's application for an online Payment Aggregator license was a routine process. The government's decision on the FDI issue concerning Paytm Payments Services Ltd will follow a comprehensive examination by the inter-ministerial committee, reflecting the government's commitment to safeguard domestic interests against foreign investments.
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