Fintech platform Paytm is in the news again. This time, it is said that the government has denied an investment of Rs 50 crore in Paytm Payment Services. This is due to concerns with regards to a Chinese shareholding in the parent company, One97 Communications, as per a Reuters report.
The report adds that another reason for the delay has been the scrutiny that Paytm has been under from the Reserve Bank of India due to its persistent “non-complaince” with regulatory practices. However, Paytm has refuted any claim of the government deferring any payment, as per MoneyControl.
A spokesperson from Paytm who spoke with MoneyControl said, "The ongoing application process has seen us promptly provide the requested information, with no indication of rejection or penalties involved. Aligning with the government’s vision and supporting Paytm as a homegrown entity is pivotal for empowering Indian companies to compete globally and drive technological advancements. Their backing ensures seamless payment services for SMEs, preserving trust and fostering digital growth for businesses and consumers."
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The Reuters report says that while the Ministry of Home Affairs did accept the investment in January, it was rejected by the foreign ministry. The reason behind the rejection was "political grounds," the report adds.
Meanwhile, while clarifying that they have not received any information about their investment being deferred, Paytm told Reuters, “In the absence of any such information, any notion of the proposal being deferred due to a lack of clarity on Chinese holdings and a penalty on Paytm is entirely false and misleading.”
On February 12, PTI reported that the government has been examining foreign direct investments that came from China in Paytm. The report says, “An inter-ministerial committee is examining investments from China in PPSL, and a decision would be taken on the FDI issue after due consideration and a comprehensive examination.”
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