RBI cancels Paytm Payments Bank's banking licence due to non-compliance
The Reserve Bank of India (RBI) cancelled the banking licence of Paytm Payments Bank Limited (PPBL), effective from the close of business on April 24, 2026, due to the bank's failure to comply with licence conditions. This action prohibits PPBL from conducting any banking business. The RBI stated it would apply to the High Court for winding up the bank, assuring sufficient liquidity to repay deposits. Paytm's parent company, One 97 Communications Ltd., has distanced itself from PPBL, clarifying it has no material business arrangements and that other Paytm services like the app, UPI, and QR will continue to operate uninterrupted.
Key Points
- The Reserve Bank of India (RBI) cancelled the banking licence of Paytm Payments Bank Limited (PPBL).
- The cancellation is effective from April 24, 2026, prohibiting PPBL from conducting banking business due to non-compliance with licence conditions.
- RBI will apply to the High Court for winding up the bank, assuring that PPBL has enough liquidity to repay deposits.
- Paytm (One 97 Communications Ltd.), PPBL's parent company, has distanced itself from the payments bank, calling it a 'separate entity'.
- Other Paytm services, including the Paytm app, UPI, QR, and Soundbox, are expected to continue operating without interruption.
Exam Facts
- RBI cancelled the licence under Section 22(4) of the Banking Regulation Act, 1949 ('BR Act').
- The effective date for the cancellation of banking business is April 24, 2026.
- PPBL was previously directed to stop onboarding new customers from March 11, 2022.
- Further business restrictions were imposed on January 31, 2024, and February 16, 2024.
- Paytm's parent company is One 97 Communications Ltd.
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