RBI says Paytm Payments Bank has conducted business in a way that harms customers’ interests. Paytm Payments Bank got a limited banking license in August 2015, which lets it take small payments but not loans. It was backed by One97 Communications.
The Reserve Bank of India (RBI) has taken away the banking license that Paytm Payments Bank Ltd. had been given. This comes more than two years after the RBI put limits on the company’s operations because of problems like not doing enough research on customers.
One97 Communications Ltd., which used to have backers like China’s Ant Group and Japan’s SoftBank, backed Paytm. In August 2015, Paytm got a limited banking license that let it take small payments but not loans.
The Reserve Bank of India told the bank in January 2024 that it could no longer accept new accounts because it was not following the rules on things like customer due diligence, the use of funds, and technology infrastructure.
Thursday, the RBI said it would ask the high court to close down the bank. On Friday, it did so.
The website for the bank says that while it is still open, its main tasks are handling withdrawals of current accounts and helping people get loans through banking contacts. It is not able to accept new payments.
What the RBI said
It was taken away because “the bank’s affairs were conducted in a manner detrimental to the interest of the bank and its depositors,” the RBI said in a statement.It said, “The general way the bank is run is bad for both depositors’ interests and the government’s interests.”
Thursday, the RBI said it would ask the high court to close down the bank. On Friday, it did so.
What the RBI has done in the past
As of March 11, 2022, Paytm Payments Bank is no longer able to take on new members.
Paytm Payments Bank could not take any new payments, credit transactions, or top-ups for customer accounts, wallets, FASTags, or NCMC cards after March 2024.
What will Paytm Payments Bank do next?
The website for the bank says that while it is still open, its main tasks are handling withdrawals of current accounts and helping people get loans through banking contacts. You can’t put new money in it.”Paytm Payments Bank Limited has enough cash on hand to repay all of its depositors when the bank closes,” the RBI said.
The company Paytm was started by Vijay Shekhar Sharma, and the Paytm Payments Bank Limited opened in 2017. But it quickly got in trouble with the authorities because it didn’t follow the rules, which included doing things like Know Your Customer (KYC) wrong and worrying about illegal financial activities.
The Paytm Payments Bank annual report for FY 24-25 says that the bank had 30 million bank accounts, over 100 million people who met the Know Your Customer (KYC) requirements, and over 300 million wallet users. It was also the company that gave out the most FASTags (over 8 million).
By order dated April 24, 2026, the Reserve Bank of India (RBI) took away Paytm Payments Bank Limited’s banking license under Section 22(4) of the Banking Regulation Act, 1949 (BR Act). The cancellation took effect at the end of business on April 24, 2026.So, as of right now, Paytm Payments Bank Limited is not allowed to do any of the “banking” activities listed in Section 5(b) or any other activities listed in Section 6 of the Banking Regulation Act, 1949. An official release from RBI said, “RBI will ask the High Court to close down the bank.”
Paytm Payments Bank Limited’s license was taken away by the Reserve Bank
“One thing that happened at the bank was bad for both the bank and the people who had money in it. Because of this, the bank is not following Section 22 (3)(b) of the BR Act.(2) The way the bank is run in general is bad for both customers’ and the public’s interests. This means that the bank is not following Section 22 (3) (c) of the BR Act. “(3) It would not be in the public interest or useful to allow the bank to continue as planned in Section 22 (3) (e) of the BR Act.””(4)The bank did not follow the rules set out in the Payments Bank license that was given to it, which is against Section 22 (3)(g) of the BR Act,” RBI said in a release.
One 97 Communications, which used to have backers like China’s Ant Group and Japan’s SoftBank, backed Paytm. In August 2015, Paytm got a limited banking license that let it take small payments but not loans.
According to what the RBI said at the time, the bank wasn’t following the rules when it came to customer due research, the use of funds, and technology infrastructure, so it stopped taking new accounts in January 2024.
The RBI had told the bank before that they couldn’t take on any new customers after March 11, 2022.
The website for the bank says that while it is still open, its main tasks are handling withdrawals of current accounts and helping people get loans through banking contacts. It is not able to accept new payments.
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