1st Time In 20 Years, RBI Can Cancel A Bank's License: Paytm Payments Bank


Mohul Ghosh

Mohul Ghosh

Mar 04, 2024


The Reserve Bank of India (RBI) is considering an unprecedented move to revoke the banking licence of Paytm Payments Bank ahead of its scheduled winding down operations on March 15th.

If it proceeds, this would mark the first time in over 20 years that the RBI has cancelled a bank’s licence.

1st Time In 20 Years, RBI Can Cancel A Bank's License: Paytm Payments Bank

Persistent Non-Compliance Drives Expected Regulatory Action

According to a media report, the drastic action is prompted by Paytm Bank’s repeated lack of due diligence and non-compliance with multiple regulatory requirements.

On January 31st, the RBI had banned the bank from taking fresh deposits and issuing loans over consistent breaches. A system audit highlighted persistent concerns.

The March 15th deadline for settling all accounts was an extension to the original February 28th timeline enforced by the RBI.

Appointment of Administrator Possible

Per the report, the RBI may appoint an administrator to oversee critical aspects of Paytm Bank’s functioning as part of the licence revocation process.

This follows One97 Communications, Paytm’s parent firm, recently approving the discontinuation of several inter-company agreements with the payments bank.


Mohul Ghosh
Mohul Ghosh
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