RBI Cancels Paytm Payments Bank Licence Under Banking Regulation Act

The Reserve Bank of India (RBI) issued an order on April 24, 2026, cancelling the banking licence of Paytm Payments Bank Limited (PPBL). The action, taken under Section 22(4) of the Banking Regulation Act, 1949, follows a history of regulatory interventions including a March 11, 2022, order to stop onboarding new customers and early 2024 restrictions on deposits and credit top-ups. The RBI determined that the bank failed to comply with several requirements under Section 22(3) of the Act, specifically regarding the protection of depositor interests (Section 22(3)(b)) and the character of the bank's management (Section 22(3)(c)).

As a result of the cancellation, PPBL must cease all banking operations immediately. The RBI stated that allowing the bank to continue would serve no useful purpose or public interest under Section 22(3)(e) and noted violations of specific Payments Bank license conditions under Section 22(3)(g). Despite the closure, the regulator confirmed that the bank possesses enough liquidity to repay its entire deposit liability. The RBI will now file an application with the High Court for the winding up of the bank to facilitate the liquidation and repayment process.