New Delhi: The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Ltd.
More than two years after RBI imposed business curbs over violations, including lapses in customer due diligence, the regulator has taken the step which bars the lender from carrying out operations with immediate effect.
RBI said Paytm Payments Bank has enough funds to repay its liabilities during the winding-up process.
Backed by One97 Communications Ltd — which once had China’s Ant Group and Japan’s SoftBank as its investors — Paytm had obtained a limited banking licence in August 2015 that allowed it to take small deposits but not give out loans.
In 2022, RBI imposed curbs on Paytm Payments Bank. The restrictions were tightened in January 2024 after repeated concerns over governance, compliance and operations surfaced.
The RBI then ordered the bank to stop accepting fresh deposits due to non-compliance of rules, including customer due diligence, use of funds and technology infrastructure.
The bank remained operational, but its activities were limited to processing withdrawals of existing deposits and facilitating loan referrals through banking correspondents, according to its website.
On Friday, RBI said it would make an application for winding up of the bank before the high court.
