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The inter-ministerial panel that oversees investments linked to China is yet to give its approval to Paytm‘s proposal to invest in its payment aggregator arm, a top government official said on Friday.

The proposal is still under consideration by the panel, which is expected to take a call soon, Financial Services Secretary Vivek Joshi told PTI.

Crisis-hit Paytm has proposed making a Rs 50 crore investment in its wholly-owned subsidiary Paytm Payment Services Ltd (PPSL).

Paytm’s parent entity One 97 Communications Ltd (OCL) has investments from China.

The inter-ministerial panel, comprising officials from foreign, home, finance and industries ministries, is looking into whether the investment proposal of One 97 Communications Ltd (OCL) into PPSL is according to FDI guidelines or not.

Once the panel approves it, Paytm can approach the RBI for a grant of payment aggregator licence, Joshi said.

Thereafter, the Reserve Bank of India will examine their proposal and take a call on providing a licence or not, he added.

Paytm Payments Services Ltd applied for a licence with the Reserve Bank in November 2020 to operate as a payment aggregator under the guidelines on Regulation of Payment Aggregators and Payment Gateways.

However, the apex bank rejected PPSL’s application in November 2022. The RBI asked the company to resubmit it to comply with Press Note 3 under FDI rules.

One97 Communications Ltd (OCL), the parent company of Paytm Payments Services Ltd, has an investment from Chinese firm Ant Group Co.

Consequently, on December 14, 2022, OCL applied to the Indian Government for past downward investment from OCL into the PPSL to comply with Press Note 3 prescribed under FDI guidelines.

Under Press Note 3, the government mandates prior approval for foreign investments from countries that share land borders with India to curb opportunistic takeovers of domestic firms following the COVID-19 pandemic.

Countries sharing land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.

Paytm Payments Bank, another subsidiary of Fintech firm Paytm, was wound down earlier this year by the Reserve Bank of India (RBI), citing persistent non-compliance with guidelines.

In a major action against Paytm Payments Bank (PPBL), the RBI, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags and other instruments after February 29.