Paytm Payments Bank Limited

RBI cancelled the banking licence of Paytm Payments Bank Limited. The Delhi High Court subsequently ordered the bank to be wound up and appointed an official liquidator.

PPBL can no longer operate as a bank. The winding-up order shifts control to the Official Liquidator, who assumes the powers of the Board and will oversee dissolution and related legal/process steps. Depositors, counterparties, and other stakeholders are affected by the closure and liquidation process.

• Section 22(4) of the Banking Regulation Act, 1949
• Sections 38 and 39 of the Banking Regulation Act 1949

RBI cancelled the banking licence of Paytm Payments Bank Limited with effect from close of business on April 24, 2026. The bank is barred from carrying on banking business and RBI will seek winding up.

With immediate effect and from close of business on April 24, 2026, Paytm Payments Bank Limited cannot conduct banking business or any additional business permitted under Section 6 of the BR Act. RBI will seek winding up in court, and the action affects the bank, its depositors, and counterparties dealing with it.

• Section 22(4) of the Banking Regulation Act, 1949
• Section 5(b) of the Banking Regulation Act, 1949
• Section 6 of the Banking Regulation Act, 1949

+4 more in the case brief

RBI extended its Section 35A restrictions on Paytm Payments Bank Ltd. The bank remains barred from accepting fresh deposits/credits or offering most banking services after March 15, 2024, while withdrawals from available balances continue to be permitted.

PPBL must continue operating under RBI-imposed business restrictions, with no new deposits/credits/top-ups and no regular banking services beyond withdrawal/use of existing balances after March 15, 2024. Customers, merchants, and wallet users must make alternative arrangements, and nodal-account settlements must be completed within the stated timelines.

• Section 35A of the Banking Regulation Act, 1949

RBI imposed fresh operating restrictions on Paytm Payments Bank Ltd under Section 35A. The bank must stop fresh deposits/top-ups after February 29, 2024 and curtail other services, while allowing withdrawals from existing balances.

PPBL cannot onboard fresh inflows or provide several core payment/banking services after the specified date, which materially limits its operating model. Customers can still withdraw or use existing balances, while nodal account counterparties must wind down and settle transactions by the stated deadlines.

• Section 35A of the Banking Regulation Act, 1949

RBI imposed a monetary penalty of ₹5.39 crore on Paytm Payments Bank Limited for multiple regulatory non-compliances. The issues covered KYC/AML, cyber security, reporting, and payments-bank operational compliance.

Paytm Payments Bank Limited must absorb the monetary penalty and continue operating in compliance with the cited RBI directions. The order does not state a suspension or operating restriction, but it signals heightened supervisory scrutiny and the need to fix KYC/AML, cyber security, reporting, and payments-platform control weaknesses going forward.

• Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949

RBI directed Paytm Payments Bank Ltd to stop onboarding new customers with immediate effect. The bank must also undergo a comprehensive IT system audit before any future onboarding can resume with RBI permission.

Paytm Payments Bank cannot onboard new customers until RBI reviews the IT audit report and grants specific permission. Existing customers are not said to be barred in this release, but the bank faces immediate operational limits and must complete the audit before any resumption of onboarding. Potentially affected parties include prospective customers and the bank’s onboarding operations.

• section 35A of the Banking Regulation Act, 1949

RBI imposed monetary penalties on Paytm Payments Bank Limited and Western Union Financial Services Inc. The action was taken for reporting/licensing-related non-compliance under the PSS Act and MTSS Directions.

Both entities must absorb the regulatory censure and ensure future compliance with the PSS Act and applicable RBI directions. The penalties do not invalidate customer transactions, but they signal heightened supervisory scrutiny over authorisation-related disclosures and MTSS remittance limits.

• Section 26 (2) of Payment and Settlement Systems Act, 2007
• Section 30 of the PSS Act
• Section 31 of the PSS Act

This RBI action affected 2 entities. This profile is linked as primary.