- The Reserve Bank of India (RBI) has revoked Paytm Payments Bank Limited's banking license through its official judgment. The bank is prohibited from conducting any banking activities because of this regulation under the Banking Regulation Act.
- The RBI said the decision was taken because the bank was not following regulatory requirements. The Payments Bank management operated their business activities in a manner which endangered both depositors and public safety.
- The central bank found that Paytm Payments Bank did not follow all necessary regulations throughout its operational period. The company received its first customer onboarding restrictions from the RBI on March 11 2022 because of multiple regulatory violations. The RBI banned the company from accepting deposits in 2024 which resulted in additional restrictions.
- The RBI has now escalated these measures and cancelled the license completely. The bank plans to appeal its case to the High Court so it can obtain permission to terminate its banking activities.
- The central bank confirmed that Paytm possesses enough cash to meet its financial obligations. The company plans to use these funds for making payments which will help complete its obligations to depositors.
- The cancellation of Paytm Payments Bank's banking operating authority resulted in their loss of operating rights.
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