The Reserve Bank of India (RBI) has ended the banking licence of Paytm Payments Bank for non-compliance with regulatory norms.
It said the action takes effect from “close of business on April 24, 2026,” and that the bank is “prohibited from conducting the business of ‘banking’… with immediate effect.”
RBI also said it will make an application for winding up of the bank before the High Court.
Why the licence was cancelled
RBI said the decision was taken due to governance and compliance concerns.
It stated: “The affairs of the bank were conducted in a manner detrimental to the interest of its depositors.”
It further added: “The general character of the management of the bank is prejudicial to the interest of depositors as also the public interest… no useful purpose or public interest would be served by allowing the bank to continue.”
What happens to your money
RBI said Paytm Payments Bank has sufficient liquidity to repay its entire deposit liability during winding up.
It noted that the bank “has enough liquidity to repay its entire deposit liability upon winding up of the bank.”
This means customer deposits are expected to be returned through the winding-up process.
Company clarification
One 97 Communications Limited (Paytm) said it has no exposure to Paytm Payments Bank and no material business arrangements with it.
It said: “No services provided by the Company are in partnership with PPBL. Additionally, PPBL operates independently, with no board or management involvement from the Company.”
It also added: “There is no direct financial impact on the Company since… the Company had already impaired its investment in PPBL as of March 31, 2024.”
What users should know
Paytm Payments Bank will stop banking operations
RBI has ordered winding up proceedings
Deposits are expected to be repaid under RBI supervision
Paytm says its other services remain unaffected
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