What happened
The Reserve Bank of India officially cancelled the banking licence of Paytm Payments Bank Limited on April 24, 2026. The order, issued under Section 22(4) of the Banking Regulation Act 1949, came into force the same day. From that moment, the bank is no longer permitted to carry out any banking activities or take on any additional financial business.
The RBI has also announced it will approach the High Court to begin the formal process of winding up the bank.
Why the RBI pulled the plug
- The bank was run in a way that harmed the interests of its own depositors, putting it in breach of Section 22(3)(b) of the BR Act.
- The management’s conduct was considered harmful, not just to depositors, but to the general public. This violated Section 22(3)(c) of the BR Act.
- Allowing the bank to continue would serve no meaningful purpose or public benefit, as noted under Section 22(3)(e) of the BR Act.
- The bank repeatedly failed to meet the conditions set out in its Payments Bank licence, violating Section 22(3)(g) of the BR Act.
A timeline of restrictions
| March 11, 2022 | RBI ordered Paytm Payments Bank to stop onboarding any new customers. |
| Jan 31, 2024 | RBI imposed stricter business restrictions, no further deposits, credits, or top-ups allowed in existing accounts. |
| Feb 16, 2024 | Additional curbs were placed on prepaid instruments and wallets. |
| April 24, 2026 | Banking licence fully cancelled. Winding-up process to begin in the High Court. |
Note
Despite the shutdown, the bank holds enough funds to repay all depositors in full. Account holders will not lose their money.
Source: Reserve Bank of India, Press Release 2026-2027/143, issued April 24, 2026 by Chief General Manager Brij Raj.
