The Reserve Bank of India (RBI) has revoked the banking licence of Paytm Payments Bank, effectively bringing its operations to an end and initiating the process for winding up the entity, according to a report by The Times of India.
As reported by The Times of India, the central bank’s decision takes immediate effect, prohibiting the payments bank from conducting any form of banking activity. The move follows a series of regulatory actions and restrictions imposed on the institution over the past few years, which had already reduced it to a limited, runoff operation.
The RBI stated that the cancellation was carried out under provisions of the Banking Regulation Act, 1949, citing persistent non-compliance with regulatory requirements. Officials noted that the bank’s functioning was deemed detrimental to the interests of depositors and the broader public.
According to The Times of India, the central bank will approach the High Court to initiate formal winding-up proceedings. The decision marks a decisive step in regulatory enforcement within India’s digital banking sector.
The payments bank had been under scrutiny for several years due to compliance lapses, including issues related to customer due diligence and governance standards. Earlier measures had already barred the bank from accepting fresh deposits and onboarding new customers, significantly limiting its operations.
Despite the shutdown, the RBI has indicated that the bank possesses sufficient liquidity to meet its deposit obligations during the winding-up process.
The development represents one of the most significant regulatory actions against a payments bank in India, underscoring the RBI’s focus on ensuring adherence to financial norms and safeguarding depositor interests.
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