- The Reserve Bank of India revoked Paytm Payments Bank's licence effective April 24
- The bank is barred from all banking activities and must wind up operations
- Paytm Payments Bank has enough liquidity to repay deposit liabilities during winding up
The Reserve Bank of India revoked the banking licence of Paytm Payments Bank Limited effective April 24 and said it will seek to wind up the lender, escalating regulatory action after a series of earlier restrictions on its operations.
The bank is barred with immediate effect from carrying on banking business as defined under the Banking Regulation Act, 1949, or undertaking any additional activities permitted under the law, according to the central bank's order dated April 24. The Reserve Bank said Paytm Payments Bank has sufficient liquidity to repay all deposit liabilities during the winding-up process.
The move follows previous supervisory curbs imposed on the lender over the past four years. The bank was ordered to stop onboarding new customers from March 2022. Later restrictions announced on January 2024, and February 2024, barred further deposits, credits and top-ups in existing customer accounts, prepaid instruments and wallets.
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The regulator cited multiple grounds for cancelling the licence. It said the affairs of the bank were conducted in a manner detrimental to the interests of the bank and its depositors, while the character of its management was prejudicial to depositors and the public interest.
The regulator cited multiple grounds for cancelling the licence. It said the affairs of the bank were conducted in a manner detrimental to the interests of the bank and its depositors, while the character of its management was prejudicial to depositors and the public interest.
The Reserve Bank also said no useful purpose or public interest would be served by allowing the lender to continue operations and that it had failed to comply with conditions attached to its payments bank licence.
The central bank said it will file an application before Bombay High Court to begin the winding-up process.
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