The Reserve Bank of India (RBI) on Friday cancelled the banking licence of Paytm Payments Bank Limited, effective from the close of business on April 24, 2026.
In its official statement, the central bank 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. Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of 'banking' as defined in Section 5(b) or any additional business specified under Section 6 of the Banking Regulation Act, 1949, with immediate effect."
Why RBI took the step
The RBI outlined multiple grounds for withdrawing the licence, citing serious concerns around governance and compliance. According to the release, the bank’s operations were not aligned with regulatory requirements under the Banking Regulation Act, 1949.
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The central bank stated that the bank’s affairs were conducted in a manner harmful to its own interests as well as those of depositors. It also flagged that the overall character of the management was not in line with public interest.
Further, the RBI noted that allowing the bank to continue operations would not serve any meaningful purpose. It also pointed to the bank’s failure to meet specific conditions attached to its payments bank licence.
Previous restrictions and regulatory action
The move follows a series of earlier actions by the regulator. The bank had already been barred from onboarding new customers starting March 11, 2022. Subsequently, restrictions imposed on January 31, 2024 and February 16, 2024, limited several of its operations.
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These measures included prohibiting further deposits, credits, or top-ups in customer accounts, prepaid instruments, and wallets.
Depositors’ interests addressed
"Paytm Payments Bank Limited has enough liquidity to repay its entire deposit liability upon winding up of the bank", on customer funds, RBI clarified.
With the licence now revoked, the bank can no longer carry out any form of banking activity as defined under the law, marking a decisive end to its operations as a payments bank.
