RBI
Big blow to Paytm: RBI cancels payments bank licence with immediate effect
The Reserve Bank of India (RBI) has announced the cancellation of the banking licence of Paytm Payments Bank Limited (PPBL).
In an official statement, the RBI said, “The Reserve Bank of India (RBI) has, vide order dated April 24, 2026, cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’) effective from close of business on April 24, 2026.”
As a result, Paytm Payments Bank is prohibited from carrying out the business of “banking” as defined under Section 5(b), or any additional business specified under Section 6 of the Banking Regulation Act, 1949, with immediate effect.
The central bank also stated that it will file an application before the High Court for the winding up of the bank.
According to the RBI, Paytm Payments Bank has sufficient liquidity to repay its entire deposit liabilities during the winding-up process.
Why RBI Cancelled Paytm Payments Bank’s Licence
The Reserve Bank said the licence was cancelled after finding multiple serious violations and concerns related to the bank’s operations and management.
It stated that the affairs of the bank were being conducted in a manner detrimental to the interests of both the bank and its depositors, resulting in non-compliance with Section 22(3)(b) of the Banking Regulation Act.
The RBI also said the general character of the bank’s management was prejudicial to the interests of depositors and against public interest, leading to a violation of Section 22(3)(c) of the Act.
Further, the central bank noted that allowing the bank to continue operations would serve neither public interest nor any useful purpose, as outlined under Section 22(3)(e).
Additionally, the bank failed to comply with conditions stipulated in its Payments Bank licence, violating Section 22(3)(g) of the Banking Regulation Act.
Previous Restrictions on Paytm Payments Bank
Paytm Payments Bank had earlier been directed to stop onboarding new customers with effect from March 11, 2022.
Later, on January 31, 2024, and February 16, 2024, the RBI imposed further business restrictions on the bank.
These restrictions included a ban on further deposits, credits, and top-ups in existing customer accounts, prepaid instruments, wallets, and other related services.
The RBI said these actions were part of continued regulatory intervention before the final decision to revoke the bank’s licence.
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