The fate of about 66,000 business correspondents (BCs) and 719 permanent staff members is in a limbo following the cancellation of Paytm Payments Bank Ltd’s (PPBL) license by the Reserve Bank of India (RBI), bringing into sharp focus the viability of this niche banking model.

The Reserve Bank of India (RBI) cancelled PPBL’s license with effect from close of business on April 24, 2026. It cited the Bank’s non-compliance with various Banking Regulation Act provisions for its action.

The cancellation of Paytm Payment Bank’s license is not merely the closure of a single institution; it raises serious questions about the long-term viability of the payments bank model itself.

“The future of the employees and Business Correspondents associated with the institution now remains uncertain. These are not just numbers—they represent livelihoods built around a policy experiment in financial inclusion,” said CH Venkatachalam, General Secretary, All India Bank Employees’ Association..

RBI conceptualised Payment Banks to serve the underserved and unbanked segments. These Banks operate under a differentiated banking license that allows them to offer essential banking services without engaging in lending activities.

Payment Banks are permitted to accept deposits up to ₹2 lakh per customer, facilitate digital payments and remittances, and distribute third-party financial products such as insurance and mutual funds.

Paytm Payments Bank had approximately 66,000 BCs, with a presence across around 32 states and Union Territories, 540 districts, and 15,000 villages, covering nearly 9,000 pin codes, per its FY25 annual report. Further, the Bank employed 719 permanent staff members.

BCs are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. The Bank had an average of 17,964 on-roll and 2,086 off-roll employees worldwide, per FY2022 annual report.

“The collapse points to a deeper structural concern: whether a model that restricts core revenue generating activities can remain sustainable in a competitive banking ecosystem. Regulatory oversight, too, must be examined—not merely in terms of compliance enforcement, but also in anticipating and preventing systemic weaknesses.

“In the final analysis, it is the employees, Business Correspondents, and millions of customers who bear the heaviest burden. Any forward-looking response must therefore address three urgent priorities: protection of jobs, continuity of services for customers, and a transparent review of the policy and regulatory framework governing payments banks,” Venkatachalam said.

PPBL’s CASA (current account. Savings account) deosits collectively held a balance of Rs. 428 crore as of March 31, 2025. As of March 31, 2025, its customers had Rs. 271.8 crore in fixed deposits with the partner bank through this arrangement.

Published on April 26, 2026