Top News

New Delhi: The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Ltd (PPBL) with effect from the close of business on April 24, 2026, citing serious regulatory concerns. The action has been taken under the provisions of the Banking Regulation Act, 1949.

With this decision, Paytm Payments Bank will no longer be permitted to carry out banking operations in India. The RBI also said it will approach the High Court to begin the formal process of winding up the bank.

Paytm, in a statement, said that its consumer and merchant services will continue without disruption.

Reasons for cancellation

The central bank pointed to multiple issues in its findings. It stated that the bank’s operations were conducted in a manner that was harmful to the interests of both the institution and its depositors. Concerns were also raised about the conduct and management of the bank, which the RBI said was not aligned with public interest.

The regulator noted that the bank failed to meet conditions specified under Section 22 (3) (b) of the Banking Regulation Act. It further stated that allowing the bank to continue operations would not serve any meaningful public purpose.

Additionally, the RBI observed that the bank had not complied with key conditions attached to its payments bank licence.

Impact of the decision

Following the cancellation, Paytm Payments Bank is no longer authorised to accept deposits or offer any banking services. The RBI will now initiate legal proceedings in the High Court to wind up the bank.

Status of customer funds

The RBI has clarified that the bank currently holds sufficient liquidity to repay all its depositors during the winding-up process. This indicates that customers are expected to receive their funds as per regulatory procedures.

Effect on wallets and related services

The central bank noted that restrictions imposed earlier had already stopped fresh deposits, credits and top-ups in accounts, prepaid instruments and wallets linked to the bank.

Customers using services directly tied to Paytm Payments Bank, including wallets and FASTag, may need to shift to alternative arrangements based on further guidance from the company.

Earlier regulatory actions

The RBI had taken action against the bank in phases:

• March 11, 2022: Barred the bank from onboarding new customers
• January 31 and February 16, 2024: Imposed additional restrictions, including stopping fresh deposits and wallet top-ups

The current move marks the most stringent action, resulting in complete cancellation of the banking licence.

Next steps for customers

Customers have been advised to wait for official updates from the RBI and Paytm regarding withdrawal procedures, refunds, account closures and migration of services.