RBI revokes banking licence of Paytm Payments Bank effective immediately

The Reserve Bank of India (RBI) has dealt a final blow to Paytm Payments Bank, officially cancelling its banking license effective today, April 24, 2026. This decisive regulatory action follows the central bank’s conclusion that the entity’s business practices were fundamentally harmful to depositors' interests and consistently failed to meet the rigorous compliance standards mandated under the Banking Regulation Act, 1949.

The RBI’s order, issued under Section 22(4) of the Banking Regulation Act, prohibits the institution from conducting any "banking" business with immediate effect. Regulators cited severe lapses, noting that the management's general character was prejudicial to both public interest and the safety of depositors. Consequently, the RBI has initiated the formal process to apply for the winding up of the bank before the High Court, marking a definitive end to its operations as a licensed banking entity.

This cancellation follows a long period of regulatory scrutiny. The bank had been under pressure since March 2022, when it was initially directed to stop onboarding new customers. Further restrictions intensified in January 2024 when the central bank ordered a halt to fresh deposits, citing non-compliance with technology infrastructure and customer due diligence. For the millions of users and investors linked to the One 97 Communications-backed entity, this development signals the end of a prolonged period of operational uncertainty.