Zomato gives the RBI its PA and wallet licenses and reduces its investment in the fintech unit

Zomato gives the RBI its PA and wallet licenses and reduces its investment in the fintech unit

According to the papers, Zomato has turned over its newly obtained online payment aggregator (PA) and prepaid payment instrument (PPI) licenses to the Reserve Bank of India (RBI) via its fintech subsidiary Zomato Payment.

Foodtech giant Zomato wrote down its stake in fintech subsidiary Zomato Payment Private Limited (ZPPL), resulting in a loss of Rs 39 crore for the March quarter.

"The company has completed the impairment assessment under Ind AS 36 and acknowledged an impairment loss of Rs 39 crore in the profit as well as loss account (as exceptional item) on its investment in ZPPL," according to the filings.

Additionally, the documents revealed that the fintech division turned over to the Reserve Bank of India (RBI) its newly obtained online payment aggregator (PA) and prepaid payment instrument (PPI) licenses.

With the licenses, Zomato gained additional internal control over digital payments in addition to third-party applications by being able to process online payments on its own and provide wallet, cash card, and other services to its users. The goal was to save money on merchant fees and lower the expenses related to third-party payment services, including gateways and payment applications.

"ZPPL has decided to voluntarily surrender the certificate of authorisation gathered through the RBI to operate as an online payment aggregator under the Payment management Settlements Systems Act 2007," according to the documents.

In addition, ZPPL has chosen to voluntarily renounce its application to the RBI (which it had previously been granted permission to submit) in order to conduct business as a pre-paid payment instrument issuer in accordance with the Payments and Settlement Systems Act of 2007 as well as the Master Direction on Prepaid Payment Instruments," the statement continued.

The rest of ZPPL's activities will go on, nevertheless.

ZPPL was formed in August 2021 by the leading online food and grocery delivery service, with an authorized share capital of Rs 20 crore.

The firm, in collaboration with ICICI Bank, launched Zomato UPI, a unified payments interface (UPI), last year.