New Delhi: The Reserve Bank of India (RBI) cancelled the banking licence of Paytm Payment Bank Ltd. on Friday, April 24. Earlier, the RBI had already paused the Paytm Payment Bank from acquiring new customers and accepting deposits.
Announcing a ban on the licence, it is the last action by the RBI against the lender in a long process of regulatory action to close the Paytm bank. RBI also confirmed that Paytm Payment Bank had enough funds to pay its liabilities during the winding-up process.
“Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of ‘banking’ as defined in Section 5(b) or any additional business specified under Section 6 of the Banking Regulation Act, 1949, with immediate effect,” the RBI said in a circular.
It all started in 2022, when the RBI imposed curbs on Paytm, and with continuous supervisory concerns over operations, the RBI tightened its restrictions.
There were several codes of conduct by Paytm Bank, forcing the RBI to cancel its licence, such as Paytm going against the interests of the lender and its depositors. The regulator stated that the character of its management was prejudicial to public interest and depositors.
“No purpose would be served by allowing the lender to continue operations, and it had failed to comply with conditions attached to its payments bank licence,” the RBI said.
The parent firm of Paytm, One 97 Communications Ltd., in an exchange filing said Paytm doesn’t have any exposure to PPBL or any material business arrangements with PPBL. No services provided by the company are in partnership with PPBL. ”
Paytm services will be operating hassle-free
The parent company of Paytm confirmed that its services, such as the Paytm app, Paytm UPI, Paytm Gold, and all other services, including Paytm QR, Paytm Gateway, Paytm Money, and others, will be operating without interruption.