RBI cancels banking licence of Paytm Payments Bank

Agencies mumbai

The Reserve Bank of India (RBI) on Friday said it has cancelled the banking licence issued to Paytm Payments Bank. The licence was cancelled as the "affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors", the RBI said in a statement. "The general character of the management of the bank is prejudicial to the interest of depositors as also the public interest," it added.

Consequently, Paytm Payments Bank is prohibited from conducting any banking business. The RBI also said it will make an application to the High Court to wind up the bank. "Paytm Payments Bank Limited has enough liquidity to repay its entire deposit liability upon winding up of the bank," the central bank noted.

Detailing the reasons, the RBI stated that the bank was not in compliance with provisions as its affairs were conducted in a manner detrimental to the interests of the bank and its depositors. Further, the regulator observed that allowing the bank to continue operations would not serve any useful purpose or public interest. It also flagged non-compliance with licence conditions.

Paytm Payments Bank has been barred from onboarding new customers since March 11, 2022.