The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited, effective from the close of business on April 24, 2026, marking a major regulatory action in India’s fintech sector.
The decision has been taken under Section 22(4) of the Banking Regulation Act, 1949, following which the bank is prohibited from carrying out banking operations or related activities with immediate effect.
The RBI stated that it will approach the High Court for the winding up of the bank. It also clarified that the entity currently has adequate liquidity to repay all depositors during the wind-up process.
The regulator cited serious governance and compliance concerns, noting that the bank’s affairs were conducted in a manner detrimental to the interests of depositors and the public. It also highlighted failure to comply with licensing conditions and stated that allowing continued operations would not serve public interest.
Paytm Payments Bank had been under regulatory scrutiny for several years. In March 2022, the RBI directed the bank to stop onboarding new customers. This was followed by further restrictions in January and February 2024, including a ban on fresh deposits, credits, and wallet top-ups.
Separately, in December 2025, Paytm Payments Services was allowed to operate as a payment aggregator for offline and cross border transactions, providing some operational continuity for the broader Paytm ecosystem.
The development comes amid increased regulatory focus on fintech governance, compliance, and ownership structures in India.
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