The Reserve Bank of India on Friday cancelled the banking licence of Paytm Payments Bank Limited, more than two years after imposing business restrictions over regulatory violations.
Despite the cancellation, the bank will remain operational in a limited capacity.
According to its website, it can process withdrawals of existing deposits and facilitate loan referrals through banking correspondents, but it is not permitted to accept fresh deposits.
Paytm Payments Bank had received a limited banking licence in August 2015, backed by One 97 Communications. The licence allowed it to accept small deposits but not extend loans. The company previously counted investors such as Ant Group and SoftBank.
The RBI had directed the bank in January 2024 to stop accepting fresh deposits, citing non-compliance with regulatory requirements, including customer due diligence, use of funds, and technology systems.
The central bank said it will move an application before the high court to initiate the process of winding up the bank.