Sanchita Chatterjee, BS News Agency: Reserve Bank of India: The RBI has explicitly stated that, as a consequence of this license revocation, Paytm Payments Bank will no longer be permitted to conduct any form of banking operations. It is important to note, however, that the Payments Bank and Paytm itself are distinct entities. The Reserve Bank of India has now officially revoked the license of Paytm Payments Bank. According to a directive issued today—April 24—this order came into effect immediately upon the conclusion of banking transactions at the end of the day. The Reserve Bank clarified that this action was taken pursuant to Section 22(4) of the Banking Regulation Act, 1949. The Reserve Bank has unequivocally declared that, due to the cancellation of its license, Paytm Payments Bank is prohibited from engaging in any banking activities whatsoever. This implies that the bank can no longer accept deposits or extend any form of credit, among other banking functions. Furthermore, the Reserve Bank has issued a directive to immediately discontinue other services that had previously been authorized for the bank. Additionally, the Reserve Bank has announced that it intends to file a petition in the High Court seeking the winding up of this bank. There are multiple reasons underpinning this stringent decision by the Reserve Bank. The Reserve Bank of India asserts that the bank's operations were not conducive to the interests of its customers. Moreover, there were several issues regarding the bank's governance and management. For these reasons, the Reserve Bank has deemed it appropriate—in the best interest of the customers—to shut down Paytm Payments Bank. The Reserve Bank further noted that the bank failed to adequately comply with the specific terms and conditions mandated for the maintenance of its banking license.
It is worth noting that various restrictions had previously been imposed on Paytm Payments Bank. Since 2022, the bank had been barred from onboarding new customers. Subsequently, in 2024, these restrictions were further tightened. However, a reassuring aspect is that the bank currently holds sufficient funds to facilitate the repayment of deposits to its account holders. Consequently, the Reserve Bank has indicated that the interests of the customers will remain safeguarded.