RBI Cancels Paytm Payments Bank Licence

The bank is no longer allowed to carry out any banking activity with immediate effect. RBI will also approach the High Court to end the proceedings.

The central bank said the company has sufficient liquidity to pay all its depositors during the winding up process.

RBI has given several reasons behind this decision. It said that the affairs of the bank were conducted in a manner which was detrimental to the interest of both the institution and its depositors. It also flagged concerns surrounding the bank’s management and said its overall conduct was against the public interest.

Further, the regulator said that no meaningful public purpose would be served by allowing the bank to continue. It also noted that the company has failed to meet the conditions stipulated under its payments bank licence.

The move follows restrictions earlier imposed on the bank that almost rendered it inoperable. In March 2022, new customers were told to stop onboarding. Later, in early 2024, the RBI banned it from accepting new deposits or adding funds to existing accounts, wallets and prepaid instruments.