RBI Cancels Paytm Payments Bank Licence Under Banking Regulation Act
Summary
The Reserve Bank of India cancelled the banking licence of Paytm Payments Bank Limited effective April 24, 2026, prohibiting it from conducting any banking business under Section 22(4) of the Banking Regulation Act, 1949. RBI cited four statutory grounds: affairs conducted detrimental to depositor interests, management character prejudicial to depositors and public interest, no public interest in allowing the bank to continue, and failure to comply with licence conditions. RBI will apply to the High Court for winding up of the bank. The bank reportedly has sufficient liquidity to repay its entire deposit liability upon winding up.
“The Reserve Bank of India (RBI) has, vide order dated April 24, 2026, cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 ('BR Act') effective from close of business on April 24, 2026.”
The sequence of prior RBI enforcement actions against Paytm Payments Bank—stopping new customer onboarding in March 2022 and subsequently restricting deposits/credits in January-February 2024—demonstrates a progressive enforcement pathway culminating in full licence cancellation. Payment banks and fintech entities that hold licences subject to RBI conditions should use this case to audit their own compliance with supervisory requirements and ensure any identified deficiencies are remedied promptly before escalation.
About this source
The Reserve Bank of India is India's central bank. Its press release page is the official channel for monetary policy decisions, banking supervision actions, financial stability reports, FDI data, and the daily money market operations log. GovPing tracks every release as it appears, around 200 a month. Watch this if you cover Indian banking, manage exposure to the rupee, advise on Indian financial regulation, or run payments or fintech in South Asia. Recent examples: an RBI MPC decision holding the repo rate at 5.25% with GDP and inflation projections, financial data on 3,100 FDI companies in India 2024-25, the daily money market operations log.
What changed
RBI has exercised its power under Section 22(4) of the Banking Regulation Act, 1949 to cancel the banking licence of Paytm Payments Bank Limited, citing four independent statutory grounds under Section 22(3): management conduct detrimental to the bank and its depositors, management character prejudicial to depositor and public interests, absence of useful purpose in allowing continuation, and non-compliance with licence conditions. The cancellation takes effect from close of business on April 24, 2026, immediately prohibiting the bank from conducting any banking operations as defined in Section 5(b) or any additional business under Section 6 of the BR Act.
Payment banks, fintech entities, and financial institutions more broadly should note this enforcement action as a clear demonstration of consequences for failing to comply with RBI licensing conditions and regulatory standards. The escalation from prior restrictions—stopping new customer onboarding in March 2022 and prohibiting deposits/credits in January-February 2024—through to full licence cancellation underscores the importance of timely remediation when RBI identifies supervisory concerns. Depositors of the bank will be repaid through the winding-up process.
Archived snapshot
Apr 25, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Press Releases
| () | |
| Date : Apr 24, 2026 | |
| RBI cancels the Licence of Paytm Payments Bank Limited | |
| | The Reserve Bank of India (RBI) has, vide order dated April 24, 2026, cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’) effective from close of business on April 24, 2026. 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. RBI 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 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.
- 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. Previously, the bank was directed to stop onboarding of new customers with effect from March 11, 2022. Thereafter, on January 31, 2024 and February 16, 2024, certain business restrictions were also imposed on the bank which, inter alia, disallowed any further deposits/credits/ top-ups in existing customer accounts, prepaid instruments, wallets, etc.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/143 | | The Reserve Bank of India (RBI) has, vide order dated April 24, 2026, cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’) effective from close of business on April 24, 2026. 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. RBI 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 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.
- 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. Previously, the bank was directed to stop onboarding of new customers with effect from March 11, 2022. Thereafter, on January 31, 2024 and February 16, 2024, certain business restrictions were also imposed on the bank which, inter alia, disallowed any further deposits/credits/ top-ups in existing customer accounts, prepaid instruments, wallets, etc.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/143 |
| The Reserve Bank of India (RBI) has, vide order dated April 24, 2026, cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’) effective from close of business on April 24, 2026. 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. RBI 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 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.
- 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. Previously, the bank was directed to stop onboarding of new customers with effect from March 11, 2022. Thereafter, on January 31, 2024 and February 16, 2024, certain business restrictions were also imposed on the bank which, inter alia, disallowed any further deposits/credits/ top-ups in existing customer accounts, prepaid instruments, wallets, etc.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/143 | |
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
;)
Named provisions
Parties
Related changes
Get daily alerts for RBI Press Releases
Daily digest delivered to your inbox.
Free. Unsubscribe anytime.
About this page
Every important government, regulator, and court update from around the world. One place. Real-time. Free. Our mission
Source document text, dates, docket IDs, and authority are extracted directly from RBI.
The summary, classification, recommended actions, deadlines, and penalty information are AI-generated from the original text and may contain errors. Always verify against the source document.
Classification
Who this affects
Taxonomy
Browse Categories
Get alerts for this source
We'll email you when RBI Press Releases publishes new changes.
Subscribed!
Optional. Filters your digest to exactly the updates that matter to you.