RBI Cancels Paytm Payments Bank Licence Under Banking Regulation Act, Effective April 24, 2026
RBI cancels Paytm Payments Bank licence under Banking Regulation Act, effective April 24, 2026. Bank barred from operations, winding up process begins.
The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’), effective from the close of business on April 24, 2026.
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Following this decision, the bank is prohibited from conducting any banking business with immediate effect. RBI will apply for winding up of the bank before the High Court. The action has been taken and is now in effect.
RBI Cancels Licence of Paytm Payments Bank
According to the official press release issued by RBI’s Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001, the licence cancellation has been enforced under the provisions of the Banking Regulation Act, 1949.
The order clearly states:
- Licence cancelled under Section 22(4) of the BR Act
- Effective from close of business on April 24, 2026
- Immediate prohibition on banking operations
Banking Activities Stopped with Immediate Effect
As per the RBI order, Paytm Payments Bank Limited is prohibited from conducting:
- The business of ‘banking’ as defined in Section 5(b)
- Any additional business specified under Section 6 of the Banking Regulation Act, 1949
This restriction has come into force immediately after the cancellation order.
RBI to Initiate Winding Up Proceedings
RBI has confirmed that it will make an application before the High Court for winding up of Paytm Payments Bank Limited.
The regulator also stated that the bank has enough liquidity to repay its entire deposit liability upon winding up.
Reasons Cited by RBI for Licence Cancellation
The Reserve Bank of India listed the following reasons:
- The affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors, thus not complying with Section 22(3)(b) of the BR Act.
- The general character of management was prejudicial to the interest of depositors and public interest, violating Section 22(3)(c) of the BR Act.
- No useful purpose or public interest would be served by allowing the bank to continue as envisaged in Section 22(3)(e) of the BR Act.
- The bank failed to comply with conditions stipulated in its licence, thereby violating Section 22(3)(g) of the BR Act.
Previous Restrictions Imposed on the Bank
The RBI noted that:
- The bank was directed to stop onboarding new customers from March 11, 2022
- On January 31, 2024 and February 16, 2024, additional business restrictions were imposed
- These restrictions disallowed further deposits, credits, and top-ups in existing customer accounts, prepaid instruments, wallets, etc.
Official Statement and Issuance Details
The press release was issued on April 24, 2026 and signed by Brij Raj.
Press Release Number: 2026-2027/143
The Reserve Bank of India has cancelled the banking licence of Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949, effective from April 24, 2026. The bank is barred from conducting any banking business and RBI will approach the High Court for winding up. The decision follows regulatory violations and prior restrictions imposed since March 11, 2022, making this a significant development in India’s banking sector.
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