It is curtains for Paytm Payments Bank Ltd (PPBL). The Reserve Bank of India (RBI) has cancelled its licence with effect from the close of business on April 24, 2026.
The central bank cited PPBL's non-compliance with various Banking Regulation Act provisions for its action.
RBI highlighted that the affairs of PPBL were being conducted in a manner detrimental to the interests of the bank and its depositors, and its failure to comply with the licensing conditions.
This is the first time that a Payments Bank has been shuttered by RBI after it started issuing licences for these niche banks in the 2015-16 period.
With this, the number of payments banks shrinks to five – Airtel Payments Bank, India Post Payments Bank, Fino Payments Bank, Jio Payments Bank and NSDL Payments Bank.
“RBI will make an application for winding up of the bank before the High Court...PPBL has enough liquidity to repay its entire deposit liability upon winding up of the bank,” per a central bank statement.
Some of the other reasons cited by the RBI for cancelling PPBL’s licence include the general character of the management of the bank being prejudicial to the interest of depositors, as also the public interest; and no useful purpose or public interest would be served by allowing the bank to continue.
Paytm Payments Bank came into regulatory crosshairs due to certain material supervisory concerns relating to adherence to KYC norms and compliance systems, repeated regulatory violations, among others.
The regulatory noose around the bank tightened in March 2022, when the RBI directed it to stop on-boarding new customers. The bank was also directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system.
Thereafter, on January 31, 2024 and February 16, 2024, certain business restrictions were imposed on the bank, which, inter alia, disallowed any further deposits/ credits/ top-ups in existing customer accounts, prepaid instruments, wallets, etc.
In the wake of the regulatory action, the Vijay Sekhar Sharma promoted One 97 Communications Ltd, which owns the Paytm platform, has started transitioning the services provided by PPBL to other partner banks to ensure continued services for its customers and merchants.
Besides payments, Paytm is now also into lending, insurance distribution and financial products (mutual funds, stocks, bonds via Paytm Money).
Published on April 24, 2026