The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank with effect from the close of business on April 24, 2026.

The bank is no longer allowed to carry out any banking activity with immediate effect. The RBI will also move the High Court to start winding up proceedings.

The central bank said the company has enough liquidity to repay all its depositors during the winding up process.

The RBI listed multiple reasons for the decision. It said the bank’s affairs were run in a way that was harmful to the interests of both the institution and its depositors. It also flagged concerns around the management of the bank, saying its overall conduct was against public interest.

Further, the regulator said allowing the bank to continue would not serve any meaningful public purpose. It also noted that the company failed to meet the conditions set under its payments bank licence.

The move follows earlier restrictions imposed on the bank by the RBI which had rendered it almost defunct. In March 2022, it was asked to stop onboarding new customers. Later, in early 2024, the RBI barred it from accepting fresh deposits or adding funds to existing accounts, wallets and prepaid instruments.

Following these restrictions, Paytm had already shifted away from its payments bank. Its payments business continued through UPI partnerships with banks such as Axis Bank, HDFC Bank and SBI under the third-party application provider (TPAP) model.

The fintech major secured the TPAP licence from the NPCI in March 2024. Earlier this year, its subsidiary Paytm Payments Services Ltd (PPSL) bagged payment aggregator (PA) licence for offline payments as well as cross-border transactions (both inward and outward).

The company has also since reported a financial turnaround. In Q3 FY26, Paytm posted a net profit of ₹225 Cr against a loss of ₹208 Cr a year ago, while revenue rose 20% year-on-year to ₹2,194 Cr. EBITDA came in at ₹156 Cr with a 7% margin, compared to a loss in the year-ago period.

Shares of Paytm ended today’s trading session 1.1% lower at ₹1,147.1.

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