The Reserve Bank of India has cancelled the banking licence of Paytm Payments Bank Limited, effective from the close of business on April 24, 2026, citing serious regulatory breaches and concerns over the bank’s management and operations.
In an order issued on Friday, the central bank said the institution had conducted its affairs in a manner that was detrimental to both the bank and its depositors. It also stated that the general character of the bank’s management was prejudicial to public interest, prompting the regulator to take the step of revoking its licence.
The licence, originally granted under Section 22(4) of the Banking Regulation Act, 1949, has now been withdrawn. As a result, Paytm Payments Bank is no longer permitted to carry out banking operations or engage in any related business activities with immediate effect.
The RBI said the bank had failed to comply with several conditions attached to its payments bank licence. It added that allowing the institution to continue operating would not serve any useful purpose or align with the public interest.
“The affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors,” the RBI said in its statement, underlining the seriousness of its findings.
The central bank also announced that it will begin the process of winding up Paytm Payments Bank by filing an application before the appropriate High Court. Despite the closure, the RBI sought to reassure customers, stating that the bank has sufficient liquidity to fully repay all deposit liabilities during the winding-up process.
The action marks the culmination of a series of regulatory measures taken against the bank over the past several years. In March 2022, Paytm Payments Bank was directed to stop onboarding new customers. That restriction remained in place as the regulator continued to scrutinise its compliance systems and governance practices.
Further action followed in early 2024, when the RBI imposed additional restrictions on the bank. These included a ban on accepting fresh deposits, credits, or top-ups in customer accounts, wallets, and prepaid payment instruments. Those measures significantly curtailed the bank’s operations and raised questions about its long-term viability.
Paytm Payments Bank, launched as part of India’s push toward digital financial inclusion, had played a prominent role in the country’s expanding fintech sector. Its closure is expected to have implications for customers, merchants, and the broader digital payments ecosystem.
The RBI has indicated that depositor interests remain protected and that the repayment process will be closely monitored as the bank moves toward formal liquidation.
