RBI cancels banking license of Paytm Payments Bank

• Manish Kumar
• 25 Apr 2026
• 35 Views

On 24 April, 2026, the Reserve Bank of India (RBI) cancelled the banking license of Noida-based Paytm Payments Bank Limited (PPBL) u/s 22(4) of the Banking Regulation Act, 1949. The lender has been banned by the central bank from carrying out operations with immediate effect. According to the RBI, PPBL has sufficient funds for repayment of liabilities during the winding-up procedure. 

The cancellation of PPBL’s licence is the final step in a long series of regulatory actions taken by the RBI to shut down the payments bank. The central bank had already stopped it from taking in new customers and from accepting deposits in the past. The RBI’s action began in 2022. In this year, it first placed restrictions on the payments bank. In 2024, these restrictions were made even stricter after repeated concerns arose regarding the PPBL’s governance, compliance and operations. 

The regulator mentioned several grounds for Paytm Payments Bank license’s cancellation. It stated that the payment bank’s conduct was against the interests of its depositors, and also said that the PPBL management’s conduct was injurious to depositors as well as the public interest.

According to RBI, allowing the bank to carry on with operations would not serve any useful purpose. It also noted that the bank had failed to comply with conditions mandated under its licence. One 97 Communications Ltd, the parent firm of Paytm, said in an exchange filing that Paytm has no exposure to PPBL and that the former has no material business arrangements with the latter entity. It further mentioned that none of the services given by the Company are in tie-up with PPBL.

Additionally, PPBL operates on an independent basis, and the Company’s board and management are not engaged in any of its operations. There is no direct financial impact on the Company because, as previously disclosed, it had already significantly declined its investment in the payment bank (as of 31 March, 2024). 

In a regulatory filing, the parent firm said, “As informed earlier, Paytm (One 97 Communications Limited) and its services, which have been operating without interruption, will continue to operate uninterrupted. These include the Paytm app, Paytm UPI, Paytm Gold and all other services offered by its subsidiaries and associated companies such as Paytm QR, Paytm Soundbox, Paytm card machines, and Paytm Payment Gateway, Paytm Money, among others." 

Source: NDTV News & BFSI Economic Times