The Reserve Bank of India has cancelled the banking licence of Paytm Payments Bank Ltd, effective from the close of business on April 24, 2026, marking the final regulatory action against the bank after a series of restrictions that began in 2022.

The licence has been cancelled under Section 22(4) of the Banking Regulation Act, 1949. Following the order, Paytm Payments Bank has been prohibited from conducting the business of banking, or any additional business permitted under the Banking Regulation Act, with immediate effect. RBI said it will make an application for winding up of the bank before the High Court.

In its response, Paytm said there will be no financial or operational impact from the PPBL licence cancellation, as it has no exposure or business linkage with the bank, had already impaired its investment in 2024, and all its services continue to operate uninterrupted.

RBI cites depositor, public interest concerns

RBI said the bank’s affairs were conducted in a manner “detrimental to the interest of the bank and its depositors”. It also said the “general character of the management of the bank is prejudicial to the interest of depositors as also the public interest.”

The regulator added that “no useful purpose or public interest would be served by allowing the bank to continue”, and said the bank had failed to comply with conditions stipulated in its payments bank licence.

RBI also said Paytm Payments Bank has enough liquidity to repay its entire deposit liability upon winding up.

Restrictions began in 2022

The action follows a long regulatory trail. On March 11, 2022, RBI directed Paytm Payments Bank to stop onboarding new customers with immediate effect. The restriction continued to remain in force later as well, with RBI clarifying in 2024 that the bank could not onboard any new customers after March 11, 2022.

On January 31, 2024, RBI imposed major business restrictions on the bank after citing persistent non-compliance and supervisory concerns. The regulator barred further deposits, credit transactions and top-ups in customer accounts, prepaid instruments, wallets, FASTags and NCMC cards.

2024 order had already crippled operations

RBI later extended the deadline for customers to make alternate arrangements to March 15, 2024. After that date, customers could not deposit money into accounts with Paytm Payments Bank, receive salary credits, government benefit transfers, or top up wallets, FASTags and NCMC cards, except for permitted credits such as refunds, cashbacks, sweep-ins from partner banks and interest.

Those restrictions had already effectively shut the inflow side of the bank’s business. The April 24, 2026 order now formally ends the bank’s licence and moves the matter toward winding up.