Mumbai: In a major regulatory crackdown, the Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited, directing it to halt all operations with immediate effect.
The central bank said the decision was taken after serious concerns that the bank’s functioning was not aligned with the interests of its depositors. This dramatic move comes after months of regulatory scrutiny and restrictions imposed on the bank.
Earlier, the RBI had already barred the bank from adding new customers and accepting fresh deposits. Despite repeated warnings, the bank failed to address issues related to governance and compliance, leading to the ultimate penalty—licence cancellation.
While the shutdown raises concerns among users, the RBI has reassured customers that the bank has enough funds to repay all its liabilities. Existing account holders will be able to withdraw their money without disruption.
However, all banking services through Paytm Payments Bank accounts will now come to a complete stop. The company is expected to clarify soon how this decision will affect Paytm wallets and other digital services.
The move signals the RBI’s firm stance on regulatory compliance and depositor protection in India’s rapidly evolving fintech sector.
