Paytm Payments Bank removed from RBI Act Second Schedule
Why in the news
On 7 October 2026 the Reserve Bank of India (RBI) announced that Paytm Payments Bank Limited no longer figures in the Second Schedule to the RBI Act, 1934, so it has lost its status as a scheduled bank.
Key facts
- Bank: Paytm Payments Bank Limited.
- Action: exclusion from the Second Schedule to the RBI Act, 1934.
- Notification: DoR.LIC.No.S3674/16.13.215/2026-27, dated 31 July 2026.
- Gazette: published in the Gazette of India (Part III – Section 4) on 7 September 2026.
- Press release: 2026-2027/1273, issued on 7 October 2026 by Chief General Manager Brij Raj.
| Date | Event |
|---|---|
| 2021 | Paytm Payments Bank included in the Second Schedule |
| 24 April 2026 | RBI cancels its banking licence from close of business |
| 31 July 2026 | Exclusion notification issued |
| 7 September 2026 | Notification published in the Gazette |
| 7 October 2026 | RBI press release announces the exclusion |
About the licence cancellation
RBI cancelled the licence on 24 April 2026 using Section 22(4) of the Banking Regulation Act, 1949. It found that the bank’s affairs were run in a way harmful to depositors, that the character of its management hurt depositor and public interest, and that it had not complied with its payments bank licence conditions. RBI said it would apply to the High Court for winding up and that the bank had enough liquidity to repay all its deposits.
About the Second Schedule
Banks listed in the Second Schedule are known as scheduled banks. Under Section 42 of the RBI Act, each such bank must keep an average daily cash balance with RBI as a share of its demand and time liabilities in India. Section 42(6) gives RBI the power to include or exclude banks.
Exam angle
- Second Schedule = list of scheduled banks under the RBI Act, 1934.
- Licence cancellation for banks falls under Section 22(4) of the Banking Regulation Act, 1949.
- Exclusion notices are formally published in Part III – Section 4 of the Gazette of India.