Paytm Payments Bank’s Licence Cancelled By RBI

New Delhi:

Paytm Payments Bank Ltd has lost its banking licence, with the Reserve Bank of India banning the lender from carrying out operations with immediate effect. The RBI said Paytm Payments Bank Ltd (PPBL) has enough funds to repay its liabilities during the winding-up process.

Today’s decision is the last RBI action against the lender in a long process of regulatory action to close Paytm Payments Bank. The RBI had already banned it from taking new customers and accepting deposits.

The RBI’s action began in 2022 when it imposed curbs on the lender. It tightened the curbs in 2024 after repeated supervisory concerns over governance, compliance and operations surfaced.

The RBI cited multiple grounds for cancelling the licence, including the conduct of the affairs of the bank going against the interests of the lender and its depositors. The regulator said the character of its management was prejudicial to depositors and public interest.

The RBI said no purpose 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.

Paytm’s parent firm One 97 Communications Ltd in an exchange filing said Paytm “does not have any exposure to PPBL or any material business arrangements with PPBL. No services provided by the Company are in partnership with PPBL…”

“Additionally, PPBL operates independently, with no board or management involvement from the Company. There is no direct financial impact on the Company since, as previously disclosed, the Company had already impaired its investment in PPBL as of March 31, 2024.

“As informed earlier, Paytm (One 97 Communications Limited) and its services, which have been operating without interruption, will continue to operate uninterrupted. These include the Paytm app, Paytm UPI, Paytm Gold and all other services offered by its subsidiaries and associated companies such as Paytm QR, Paytm Soundbox, Paytm card machines, and Paytm Payment Gateway, Paytm Money, among others,” it said in the regulatory filing.