Taking strict action, the Reserve Bank of India (RBI) has canceled the banking license of Paytm Payments Bank. The central bank gave this information in an official statement. After this decision of RBI, Paytm Payments Bank will no longer be able to provide banking services. This action has been taken due to concerns related to violation of regulatory standards and compliance. The central bank said that the further process will be decided keeping in mind the protection of customers’ interests, so that there is no adverse impact on deposits and other services.
RBI will file application in High Court to close the bank
RBI said that the business has been conducted in a manner which is harmful to the interests of depositors. RBI also said that Paytm Payments Bank failed to comply with the rules stipulated in the payments bank license issued to it. RBI also said that it will file an application in the High Court to close the bank.
Why was the license canceled
- According to the RBI, the affairs of the bank were being conducted in a manner which was detrimental not only to the interests of the bank but also to its customers. This situation was found to be contrary to the provisions of Section 22 (3)(b) of the Banking Regulation Act (BR Act).
- Furthermore, the management structure of the bank was also not considered to be in the interest of the depositors and public interest, thereby violating Section 22 (3)(c) of the BR Act.
- The central bank also said that allowing the bank to continue in the same form under the current circumstances would not serve any useful purpose or public interest, which is against Section 22 (3)(e).
- Additionally, the bank failed to comply with the conditions attached to its payments bank license, thereby violating Section 22(3)(g) of the BR Act.
What did RBI say in the statement?
The Reserve Bank of India, vide order dated April 24, 2026, has canceled the banking license issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (BR Act). This order will be effective from the close of business on April 24, 2026. Consequently, Paytm Payments Bank Limited is prohibited, with immediate effect, from carrying on the business of ‘banking’ as defined in Section 5(b) of the Banking Regulation Act, 1949 or any additional business specified under Section 6. RBI will make an application in the High Court to close the bank.
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