Paytm Payments Bank Licence Cancelled by RBI
Why in the news
After years of supervisory worries and earlier curbs, the RBI took the last step and revoked the licence of Paytm Payments Bank Limited (PPBL) to operate as a bank, with effect from the end of business on 24 April 2026.
Key facts
- Legal basis: Section 22(4) of the Banking Regulation Act, 1949.
- Bar: PPBL cannot carry on “banking” as defined in Section 5(b), or other business under Section 6.
- Next step: RBI plans to petition the High Court for a liquidator to handle winding up.
- Depositors: RBI said PPBL has sufficient liquidity to pay all deposit liabilities, to be returned via the court-monitored process.
- Reason cited: persistent non-compliance and affairs run in a manner detrimental to depositors’ interests.
- Top-ups and fresh deposits had been barred since early 2024, so most users had over two years to use up their balances.
| Paytm service | Status | Why |
|---|---|---|
| Paytm UPI | Active | Runs on third-party bank handles such as Axis, HDFC and SBI |
| Paytm QR and Soundbox | Active | Merchant services independent of PPBL |
| Paytm Wallet | Discontinued | Was a PPBL product; no longer reloadable |
| Paytm Gold and Money | Active | Run by other One 97 subsidiaries |
Concepts
- Paytm App versus Paytm Bank: One 97 Communications Ltd clarified that the app is not the bank.
- Payments bank: accepts deposits (up to ₹2 lakh) and offers payments and remittances but cannot give loans or issue credit cards.
- Winding up: closing a company by selling assets, clearing debts and distributing any balance to stakeholders, here depositors.
Exam angle
- Section 22(4) of the BR Act, 1949 deals with this licence cancellation.
- Liquidator is sought from the High Court.
- Payments bank limit: ₹2 lakh deposits; no lending.