RBI cancels Paytm Payments Bank license

India’s central bank has cancelled Paytm Payments Bank’s licence and moved to shut the bank down. (rbi.org.in) The Reserve Bank of India said its April 24, 2026 order took effect from the close of business that day under Section 22(4) of the Banking Regulation Act, 1949. The bank is now barred from conducting banking business and the RBI said it will apply to the High Court for winding up. (rbi.org.in) The RBI said Paytm Payments Bank has enough liquidity to repay its entire deposit liability during the winding-up process. It said the bank’s affairs were conducted in a manner “detrimental” to the bank and its depositors, and that management was “prejudicial” to depositors and the public interest. (rbi.org.in) (business-standard.com) For customers, the immediate question is what still works. Paytm said in an exchange filing that the listed company has no exposure to Paytm Payments Bank, no material business arrangements with it, and no direct financial impact. (business-standard.com) (businesstoday.in) Paytm also said its consumer and merchant products, including the Paytm app, UPI, QR, Soundbox, card machines and payment gateway, will continue to operate uninterrupted. The RBI action applies to Paytm Payments Bank Ltd, not to the broader Paytm payments app business run through partner banks. (businesstoday.in) (msn.com) This was the final step in a long regulatory case, not a surprise one-day crackdown. The RBI had already stopped the bank from onboarding new customers from March 11, 2022, then barred further deposits, credits and top-ups in January and February 2024. (rbi.org.in) (outlookbusiness.com) The compliance concerns also stretch back further. Outlook Business reported that an RBI audit in 2018 found gaps in Know Your Customer checks, including multiple accounts linked to a single Permanent Account Number and transactions beyond prescribed limits. (outlookbusiness.com) Ownership was another point of focus. According to Business Standard, Paytm founder Vijay Shekhar Sharma held 51% of Paytm Payments Bank in its FY25 annual report, while One97 Communications held 49%. (business-standard.com) A day later, Paytm Payments Bank’s board and shareholders approved resolutions to begin the winding-up process, either as directed by the RBI or voluntarily with its approval. That leaves the court-supervised shutdown and repayment process as the next chapter after years of restrictions. (ndtvprofit.com)