Campus Times | Lucknow 

In a major regulatory action, the Reserve Bank of India (RBI) has cancelled the licence of Paytm Payments Bank over non-compliance with regulatory norms, stating that the bank’s operations were detrimental to the interests of depositors and the public.

The central bank announced that the licence stands cancelled with immediate effect from the close of business hours on Friday. It also indicated that it will approach the High Court to initiate the formal process of winding up the bank.

Why RBI Took Action

According to the RBI, Paytm Payments Bank failed to comply with conditions laid down under the Banking Regulation Act, 1949. The regulator further stated that the management practices of the bank were “prejudicial to the interests of depositors” and that allowing it to continue operations would not serve any public interest.

The bank has also been under regulatory scrutiny in the past. In March 2022, the RBI had barred it from onboarding new customers due to similar concerns.

Is Your Money Safe?

The RBI has reassured customers that their funds are secure. In its official statement, the central bank confirmed that the bank has sufficient liquidity to repay all depositors during the winding-up process.

What Happens to Paytm Users?

For customers, there is no immediate disruption in day-to-day digital payments:

The Paytm app will continue to function as usual

UPI payments, mobile recharges, and bill payments remain unaffected

Paytm QR, Soundbox, card machines, and payment gateway services will continue operating normally

Company’s Response

One97 Communications, the parent company of Paytm, clarified in its regulatory filing that it has no financial exposure to Paytm Payments Bank, having already impaired its investment in the entity.

The company emphasized that its broader ecosystem—including services like Paytm Money and Paytm Gold—remains fully operational and unaffected by the RBI’s action.

What Customers Should Do

While there is no need for immediate concern, customers are advised to:

Stay updated with official announcements from RBI and Paytm

Gradually shift balances if required, depending on future instructions

Avoid panic withdrawals, as funds are secured and protected