Paytm Payments Bank

Finance

25.04.2026
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“The bank is not complying with provisions of Section 22 (3) (c) of the BR Act,” said the Reserve Bank of India (RBI). This statement marks a significant turning point for Paytm Payments Bank, which has faced numerous regulatory challenges over the past years.

The RBI has officially cancelled the banking licence issued to Paytm Payments Bank Limited. The bank is now prohibited from conducting any business effective immediately. The RBI stated that the bank possesses sufficient liquidity to repay its entire deposit liability upon winding up operations.

Paytm Payments Bank has been under regulatory scrutiny since 2018 due to multiple compliance concerns. The RBI imposed a penalty of Rs 5.39 crore on the bank in October 2023 for failing to meet financial compliance standards. Additionally, it barred the bank from accepting deposits or top-ups in any customer account after February 29, 2024.

The RBI highlighted violations related to know-your-customer (KYC) norms as a key issue. The management practices were found detrimental to both depositors and public interest. As a result, Paytm Payments Bank was directed to stop onboarding new customers effective March 11, 2022.

In its findings, the RBI noted, “The general character of the management of the bank is prejudicial to the interest of depositors as also the public interest.” This underscores serious concerns regarding how the bank was managed. The RBI will apply to the High Court for the winding up of Paytm Payments Bank, following orders from March 2022 and additional restrictions imposed in early 2024.

Vijay Shekhar Sharma holds a 51% stake in Paytm Payments Bank, while One97 Communications owns 49%. Yet, these ownership stakes did not shield the bank from scrutiny or regulatory action.

The RBI concluded that 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. As this situation unfolds, stakeholders await further developments regarding the future of Paytm Payments Bank and its operations.