New Delhi. The Reserve Bank of India (RBI) announced on Friday that it has canceled the banking license of Paytm Payments Bank Limited. This decision follows regulatory actions taken over two years ago due to violations, including shortcomings in customer due diligence.
Paytm, backed by One 97 Communications and previously supported by investors like China's Ant Group and Japan's SoftBank, obtained a limited banking license in August 2015. This license allowed the bank to accept small deposits but prohibited it from issuing loans.
RBI Imposed Restrictions in 2024
In January 2024, the RBI ordered Paytm Payments Bank to cease accepting new deposits. The regulator cited non-compliance with regulations related to customer due diligence, fund utilization, and technology infrastructure.
RBI to File Petition in High Court for Bank Closure
According to reports, the RBI stated on Friday that it would petition the High Court to close the bank.
As per the bank's website, it remains operational but with very limited activities. It can only process withdrawals from existing deposits and provide loan referrals through banking correspondents. However, it cannot accept new deposits. On April 24, Paytm's shares fell by 0.5%, closing at ₹1,153 per share.