RBI Cancels Paytm Payments Bank Licence: A Major Setback in Fintech Era
The Reserve Bank of India has revoked the banking licence of Paytm Payments Bank due to non-compliance with regulatory norms. The bank faces dissolution, with the high court set to oversee proceedings. This action stems from consistent failures in adhering to banking standards and previous regulatory scrutiny.
- Country:
- India
The Reserve Bank of India (RBI) announced on Friday the cancellation of the banking licence for Paytm Payments Bank, citing non-compliance with regulatory norms. This move follows a history of regulatory scrutiny against the bank.
The RBI has applied to the high court for the winding up of the bank, which has been found operating in a manner harmful to depositors' interests. Despite its licence being revoked, Paytm Payments Bank reportedly retains enough liquidity to repay all deposits.
Previously, the bank faced restrictions, including a ban on onboarding new customers in March 2022 and further business limitations. Owned by One97 Communications Ltd, which operates under the Paytm brand, the bank's operations as a payments bank began on May 23, 2017.
(With inputs from agencies.)
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