The Reserve Bank of India took a significant step by revoking the license of Paytm Payments Bank Limited due to non-compliance with regulatory requirements. As a result, the bank is no longer authorized to conduct banking operations, and the RBI will seek court approval to wind up the bank. The cancellation, effective from April 24, was made under Section 22(4) of the Banking Regulation Act, 1949.
RBI emphasized that Paytm Payments Bank has enough funds to repay all deposit obligations, ensuring the protection of depositors’ interests throughout the closure process. The central bank clarified that continuing the bank’s operations would not serve any useful purpose or public interest. Therefore, RBI will file for the bank’s winding up before the High Court.
The regulatory body pointed out that the bank had failed to adhere to the conditions outlined in its Payments Bank license, leading to a violation of the Banking Regulation Act. Earlier directives had halted new customer acquisitions from March 11, 2022, followed by additional restrictions on business activities in January and February 2024. These restrictions included prohibiting further deposits, credits, and top-ups in existing customer accounts and wallets.
