The central bank stated that the move was prompted by serious regulatory lapses and concerns over how the bank was being managed. According to the RBI, the institution’s functioning was found to be detrimental to both its depositors and its own stability, with the general character of its management deemed contrary to public interest.
आर बी आई ने पे टी एम पेमेंट्स बैंक लिमिटेड का लाइसेंस रद्द किया
RBI cancels the Licence of Paytm Payments Bank Limitedhttps://t.co/9gnglaGjYI— ReserveBankOfIndia (@RBI) April 24, 2026
With the cancellation now in force, Paytm Payments Bank is barred from carrying out any banking activities or engaging in additional business operations.
The Reserve Bank of India (RBI) has 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… pic.twitter.com/B746of2bah
— ANI (@ANI) April 24, 2026
The RBI also announced that it will initiate winding-up proceedings by approaching the High Court. However, it reassured customers that the bank currently holds adequate liquidity to fully repay all depositors during the process. The regulator emphasised that allowing the bank to continue operations would not have served any useful purpose or public interest, given its repeated non-compliance and governance issues.
In its order on Friday, the RBI said, “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.”
This latest action follows a series of earlier restrictions imposed on the bank, including a halt on onboarding new customers in 2022 and additional curbs in 2024 that banned fresh deposits, credits, and top-ups in existing accounts, wallets, and prepaid instruments.
What are the reasons behind the cancellation of the licence
The RBI terminated the licence of Paytm Payments Bank Limited as follows:
1-
The bank’s affairs were conducted in a manner that was ‘detrimental’ to the bank’s and depositors’ interests. The bank is not in compliance with Section 22(3)(b) of the BR Act.
2- The bank’s overall management is prejudicial to both depositors’ and the public’s interests. As a result, the bank is not in compliance with Section 22(3)(c) of the BR Act.
3- The bank violated Section 22 (3)(g) of the BR Act by failing to comply with the conditions indicated in the Payments Bank license issued to it.
Impact on customers
There is no immediate inconvenience expected for customers following the action. Users will still be able to access and withdraw the money currently available in their accounts, and the regulator has assured that all deposits remain protected.
As restrictions on new deposits and wallet recharges had already been in place since March 2024, many customers have gradually used or withdrawn their funds over time. This step-by-step regulatory approach was intended to prevent abrupt disruption and allow users enough time to adjust and make alternative arrangements.
What it means for your UPI, wallet and payments
Despite regulatory action against PPBL, digital services offered by One 97 Communications Limited (Paytm) are expected to continue without disruption. The company clarified that its core offerings do not rely on the payments bank and operate independently.
In an official statement, the company said, “No services provided by the company are in partnership with PPBL. Additionally, PPBL operates independently, with no board or management involvement from the company. There is no direct financial impact on the company since, as previously disclosed, the company had already impaired its investment in PPBL as of March 31, 2024.”
The recent regulatory action on Paytm Payments Bank Ltd (PPBL) has no financial or business impact on Paytm (One 97 Communications Ltd)
We have no exposure or material business arrangements with PPBL, and no services are offered in partnership with it. PPBL operates… pic.twitter.com/0iOPYrNf5u
— Paytm (@Paytm) April 25, 2026
Users can continue to access and use key services as usual, including the Paytm app, UPI payments, QR-based transactions, Soundbox, card machines, payment gateway services, Paytm Gold, and Paytm Money.
