RBI Cancels Licence of Paytm Payments Bank, Orders Winding Up
Reserve Bank of India has cancelled the banking licence of Paytm Payments Bank Limited with effect from the close of business on April 24, 2026. The action has been taken under provisions of the Banking Regulation Act, 1949, effectively prohibiting the bank from carrying out any form of banking operations with immediate effect.
According to the central bank, it will initiate proceedings to wind up the bank by approaching the High Court. RBI clarified that the payments bank currently has sufficient liquidity to repay all its depositors during the winding-up process, ensuring that customer funds remain protected.
The regulator cited multiple reasons for cancelling the licence. It said the affairs of the bank were conducted in a manner detrimental to the interests of depositors. Additionally, the overall management practices were found to be prejudicial not only to depositors but also to public interest. RBI further noted that no useful purpose would be served by allowing the bank to continue its operations, and that it had failed to comply with several licensing conditions.
The action follows a series of regulatory measures taken earlier. The bank had been directed to stop onboarding new customers from March 11, 2022. Subsequently, in early 2024, restrictions were imposed on deposits, credits, and top-ups in customer accounts, prepaid instruments, and wallets.
With this move, RBI has effectively ended the operations of Paytm Payments Bank, marking one of the strongest regulatory actions in India’s banking sector in recent years.
