RBI Revokes Paytm Payments Bank Licence, Orders Winding-Up Over Regulatory Violations !

Mumbai,Apr25(BNP): In a major regulatory action, the Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank with effect from the close of business on April 24, 2026. The decision was taken under Section 22(4) of the Banking Regulation Act, 1949.

Following the cancellation, Paytm Payments Bank has been prohibited from carrying out any banking activities as defined under the Act. The RBI has also announced that it will file an application for the winding up of the bank before the appropriate High Court.

The central bank stated that the action was necessitated due to serious and persistent non-compliance with regulatory requirements. According to RBI, the affairs of the bank were conducted in a manner detrimental to the interests of both the institution and its depositors. It further observed that the management practices were prejudicial to public interest and failed to meet the conditions stipulated under the payments bank licence.

RBI also cited violations of multiple provisions under Section 22(3) of the Banking Regulation Act, including failure to comply with licensing conditions and regulatory standards. The regulator concluded that allowing the bank to continue operations would not serve any useful public purpose.

Despite the regulatory action, the RBI has assured that the bank currently holds sufficient liquidity to repay all its deposit liabilities during the winding-up process, thereby safeguarding customer interests.

Notably, the RBI had earlier imposed restrictions on the bank, including a ban on onboarding new customers from March 2022 and subsequent curbs in early 2024 that limited deposits, credits, and wallet top-ups. The latest move marks the culmination of ongoing supervisory concerns and reinforces the central bank’s commitment to maintaining financial stability and protecting depositors.