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Central Bank Takes Paytm Payments Bank Off List of Recognised Banks
Reported by Aditya Chauhan (Staff Writer) · The Hindu - Business ·
Reported by one source so far
Photo: Wikimedia CommonsThe Reserve Bank of India has officially removed Paytm Payments Bank Limited from its list of recognised scheduled banks after cancelling its banking licence. The central bank announced on Wednesday, October 7, 2026, that the firm has been taken off the Second Schedule to the Reserve Bank of India Act, 1934. Official notifications regarding this move were issued on July 31 and published in the Gazette of India in September.
Background
In April of this year, the RBI cancelled the banking licence of PPBL due to non-compliance with rules. The regulator stated that the bank ran its affairs in a way that hurt the interests of its depositors. Following this, the Delhi High Court ordered that the bank be wound up. PPBL is an associate firm of the fintech company Paytm, which is promoted by Vijay Shekhar Sharma.
Previous Actions
Problems for the bank started earlier when the central bank put it under scrutiny. In March 2022, the RBI stopped PPBL from taking on any new customers because of serious supervisory concerns. The bank also had to hire an IT audit firm for a full system check. Later in January and February 2024, the RBI placed more business limits on the bank, which blocked any new deposits, credits, or top-ups in existing accounts, wallets, and prepaid cards.
Context
Being on the Second Schedule of the RBI Act means a bank meets strict financial standards and gets special operational privileges from the central bank. Removing an institution from this list marks the final end of its journey as a formal scheduled bank after a series of regulatory penalties and legal orders.
ExplainerWhy this matters
What Happened
The Reserve Bank of India removed Paytm Payments Bank Limited from the Second Schedule of the RBI Act, stripping it of its scheduled bank status following the earlier cancellation of its licence and a winding-up order by the Delhi High Court.
Why It Matters
Scheduled bank status is a formal recognition that grants institutions special operational privileges and assures the public that they meet strict financial standards. The complete removal of this status signals the end of a long regulatory dispute over compliance failures and protects the wider financial system from risky practices.
What Happens Next
With the winding-up order issued by the high court and the formal removal from the RBI schedule, the focus shifts to winding down any remaining operations and settling matters for affected depositors and customers under legal supervision.
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