Paytm Payments Bank will not be able to do deposits and withdrawals, RBI canceled banking license.

The Reserve Bank of India (RBI) has canceled the banking license of Paytm Payments Bank Limited (PPBL) with immediate effect from the close of business on April 24, 2026. This action has been taken under the Banking Regulation Act, 1949. After this decision, Paytm Payments Bank will no longer be able to provide any type of banking services in India. RBI has also clarified that it will approach the High Court to initiate the process of winding-up of the bank.

RBI has given many serious reasons behind canceling the license. According to the central bank, Paytm Payments Bank was being operated in a manner that was against the interests of both the bank and its customers. Additionally, questions have been raised on the character of the bank’s management, which has been described as detrimental to depositors and public interest. RBI said that the bank was not following Section 22(3)(b) of the Banking Regulation Act, which is one of the conditions required for a banking license, in its functioning. The regulator believes that in such circumstances, allowing the bank to continue is in no way in the public interest.

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Will not be able to do banking work

After the license is cancelled, Paytm Payments Bank will no longer be able to do any kind of banking activity. This means that the bank will no longer be able to accept new deposits or provide any kind of banking services. RBI will soon start the process of legally closing this bank.

It is a matter of relief for the customers that RBI has said that Paytm Payments Bank has so much liquidity that it can return the deposits of all its customers. That is, it is expected that the customers’ money will remain safe even in the event of bank closure.

Some services already banned

As far as wallets, FASTag and other prepaid services are concerned, RBI said that several restrictions had already been imposed on these services. There was a ban on adding new customers from March 11, 2022. This was followed by more stringent measures on 31 January 2024 and 16 February 2024, in which new deposits, credit and wallet top-ups were stopped. Now after the license is cancelled, customers connected to these services may have to adopt alternative arrangements in future.

This action is considered to be the toughest step taken so far by RBI. Even before this, warnings and restrictions were imposed many times but now the license has been completely cancelled.

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In such a situation, customers have been advised to wait for the official information from RBI and Paytm. This will include information related to withdrawal timelines, refund process, account closure and transfer of other services.