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The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited (PPBL), effective from the close of business on 24 April 2026.
PPBL is prohibited from conducting banking business or any additional business under the Banking Regulation Act, 1949.
The RBI will apply to the High Court to wind up the bank. The central bank confirmed PPBL has sufficient liquidity to repay its entire deposit liability upon winding up.
Grounds for Paytm licence cancellation
The RBI cited four statutory grounds under the Banking Regulation Act, 1949.
The bank’s affairs were conducted in a manner detrimental to the interests of the bank and its depositors, while the general character of its management was prejudicial to depositor and public interest.
The regulator also concluded that no useful purpose or public interest would be served by allowing PPBL to continue, and that the bank had failed to comply with the conditions of its payments bank licence.
The action follows earlier restrictions. The RBI directed PPBL to stop onboarding new customers from March 2022, before barring further deposits, credits, and top-ups in existing customer accounts, prepaid instruments, and wallets in early 2024.
Paytm’s broader operations unaffected
One97 Communications, which operates Paytm, said in a stock exchange filing that no services provided by the company are in partnership with PPBL, and that PPBL operates independently with no board or management involvement from the company.
There is no direct financial impact, as the company had already impaired its investment in PPBL as of 31 March 2024.
In a subsequent filing on 25 April, One97 Communications said PPBL’s board and shareholders had approved resolutions to enable the winding up of the bank, either as directed by the RBI or voluntarily with its permission.
The company also noted that PPBL will cease to be an associate company once the winding-up order becomes effective.
Services including the Paytm app, Paytm UPI, Paytm Gold, Paytm QR, Paytm Soundbox, Paytm card machines, Paytm Payment Gateway, and Paytm Money will continue to operate uninterrupted.
Featured image: Edited by Fintech News Singapore, based on image by vishaldesignstudio via Freepik
