The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited, effective from the close of business on April 24, 2026, according to a press release issued on Friday.
The action has been taken under Section 22(4) of the Banking Regulation Act, 1949. Following the cancellation, Paytm Payments Bank is prohibited from undertaking the business of banking or any related activities with immediate effect.
The central bank said it will apply to the High Court for winding up of the bank. It also noted that the entity has sufficient liquidity to repay its entire deposit liabilities upon winding up.
The RBI cited multiple grounds for the cancellation, stating that the affairs of the bank were conducted in a manner detrimental to the interests of the bank and its depositors. It also flagged that the management's overall conduct was prejudicial to the interests of depositors and the public.
Further, the regulator said allowing the bank to continue operations would not serve any useful purpose or public interest. It also found that the bank failed to comply with conditions stipulated in its licence.
Paytm Payments Bank has been under regulatory scrutiny for the past few years. The RBI had directed the bank to stop onboarding new customers with effect from March 11, 2022.
Subsequently, on January 31, 2024 and February 16, 2024, additional restrictions were imposed, including a bar on further deposits, credits, and top-ups in customer accounts, prepaid instruments, and wallets.
In a stock exchange filing, One 97 Communications Limited (Paytm) reiterates that it has no exposure to Paytm Payments Bank Limited (PPBL) and no material business arrangements or partnerships with the entity. PPBL operates independently, with no involvement from Paytm's board or management.
The company also clarified that it has no direct financial impact from the matter, as it had already impaired its investment in PPBL as of March 31, 2024.
Meanwhile, in December 2025, the RBI allowed Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications Limited, to operate as a payment aggregator for physical (offline) payments and cross-border transactions.
Recently, Paytm also said that it has become a majority Indian-owned company amid increased regulatory focus on fintech ownership structures.