Reserve Bank of India cancels Paytm's Payments Bank licence
24 Apr 2026, 08:06 PMThe RBI, in its note, said the "general character of the management of the bank is prejudicial to the interest of depositors as also the public interest."
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The Reserve Bank of India (RBI) has cancelled the banking licence issued to Paytm Payments Bank Limited, effective from close of business on April 24, 2026.
The cancellation is "under Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’)," the regulator said.
Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of 'banking' as defined in Section 5(b) or any additional business specified under Section 6 of the Banking Regulation Act, 1949 with immediate effect.
The central bank said it will make an application for winding up of the bank before the High Court.
"Paytm Payments Bank Limited has enough liquidity to repay its entire deposit liability upon winding up of the bank," the RBI noted.
The Reserve Bank cancelled the licence of the Paytm Payments Bank Limited as the affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors. Thus, the bank is not complying with Section 22 (3) (b) of the BR Act.
It further added that the "general character of the management of the bank is prejudicial to the interest of depositors as also the public interest." Thus, the bank is not complying with provisions of Section 22 (3) (c) of the BR Act.
"No useful purpose or public interest would be served by allowing the bank to continue as envisaged in Section 22 (3) (e) of the BR Act; The bank failed to comply with the conditions stipulated in the Payments Bank license issued to it, thereby violating the provisions of Section 22 (3)(g) of the BR Act," the RBI noted.
Vijay Shekhar Sharma holds a 51% stake in Paytm Payments Bank (PPBL), with the remaining 49% held by One97 Communications Limited (Paytm). The payments bank obtained the licence in August 2015.
Since March 2022, the bank had already been barred from onboarding new customers over "non-compliance" of rules. And in January 2024, the regulator had put full restrictions on the functioning of the payments bank.
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