Paytm Payments Bank: RBI Cancels Banking Licence

Paytm Payments Bank Limited has faced a significant setback as the Reserve Bank of India (RBI) has officially cancelled its banking licence, effective at the end of business on April 24, 2026. This decision was announced in a press release on Friday. The cancellation falls under Section 22(4) of the Banking Regulation Act, 1949. Following this action, Paytm Payments Bank is no longer permitted to engage in any banking operations or related activities immediately.

The central bank has indicated that it will approach the High Court to initiate the winding-up process of the bank. The RBI noted that the bank possesses adequate liquidity to settle its complete deposit obligations upon closure.

Reasons for Cancellation

The RBI listed several reasons for this cancellation, stating that the bank’s operations were managed in a way that negatively impacted both the bank and its depositors. It underscored that the management’s overall conduct was not in the best interests of depositors or the public. Additionally, the regulator concluded that keeping the bank operational would neither be beneficial nor serve any public interest. It was also highlighted that the bank did not adhere to the conditions set forth in its licence.

Ongoing Regulatory Scrutiny

Paytm Payments Bank has been under the watchful eye of regulators for a considerable period. The RBI had previously instructed the bank to cease onboarding new customers starting March 11, 2022. Following this, on January 31, 2024, and February 16, 2024, further restrictions were implemented, which included bans on additional deposits, credits, and top-ups in customer accounts, as well as prepaid instruments and wallets.

Recent Developments

In December 2025, the RBI permitted Paytm Payments Services Limited (PPSL), a fully owned subsidiary of One 97 Communications Limited, to operate as a payment aggregator for offline payments and cross-border transactions. In light of stricter regulatory scrutiny regarding fintech ownership structures, Paytm also announced that it has achieved majority Indian ownership status.