Mumbai, Apr 24 (TNT): The Reserve Bank of India (RBI) on Friday cancelled the banking licence of Paytm Payments Bank Limited with effect from the close of business on April 24, 2026.
The action, taken under Section 22(4) of the Banking Regulation Act, 1949, prohibits the bank from carrying out banking operations, including accepting deposits or conducting any activities defined under the Act, with immediate effect.
The RBI said it will initiate proceedings for winding up of the bank by applying to the High Court.
It, however, noted that the bank currently has sufficient liquidity to repay all its depositors.
Explaining the decision, the central bank cited multiple regulatory and governance concerns.
It said the affairs of the bank were conducted in a manner detrimental to the interests of both the institution and its depositors, and that the management’s overall functioning was prejudicial to public interest.
The RBI further stated that the bank failed to comply with licensing conditions and regulatory requirements, and that allowing it to continue operations would not serve any useful public purpose.
Earlier, the RBI had imposed a series of restrictions on the bank.
It had barred onboarding of new customers from March 11, 2022.
Subsequently, in January and February 2024, additional curbs were introduced, including restrictions on deposits, credits and wallet top-ups in existing accounts.
With the latest order, Paytm Payments Bank Limited ceases to operate as a banking entity, marking a significant regulatory action in India’s financial sector.
TNT TS
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