The Reserve Bank of India has officially removed Paytm Payments Bank from the list of recognised scheduled banks following the cancellation of its banking licence, marking the end of a severe regulatory intervention amid compliance failings.
The Reserve Bank of India has removed Paytm Payments Bank Ltd from the list of recognised scheduled banks after ending its banking licence, drawing a formal line under a prolonged regulatory crackdown on the lender. The move means the bank no longer appears in the Second Schedule to the Reserve Bank of India Act, the register that grants scheduled banks special operational privileges and signals that they meet the central bank’s financial standards.
According to Business Standard, the RBI had cancelled Paytm Payments Bank’s licence in April after concluding that the bank had failed to comply with regulatory norms and that its affairs had been run in a way that was harmful to depositors. The central bank’s notification removing the bank from the schedule was issued on 31 July and later published in the Gazette of India in September.
The development follows a wider legal and regulatory sequence that has effectively ended the bank’s operations. Business Standard and other Indian publications reported that the Delhi High Court later ordered PPBL to be wound up, after the RBI’s earlier action had already stripped the institution of its banking permission.
Paytm Payments Bank, which is linked to Vijay Shekhar Sharma’s fintech group Paytm, had already been under intense supervisory scrutiny well before the licence cancellation. In March 2022, the RBI stopped the bank from taking on new customers because of what it described as material supervisory concerns, and later imposed further restrictions that prevented fresh deposits, credits and top-ups in existing accounts, prepaid instruments and wallets. The bank was also told to commission a comprehensive IT systems audit.
Financial Express reported that the RBI had said in April that Paytm Payments Bank still had enough liquidity to repay all deposit liabilities if wound up, suggesting an orderly exit rather than a sudden collapse. It also said Paytm services more broadly remain unaffected, even as the bank itself is removed from the formal list of scheduled lenders.
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