RBI strips Paytm Payments Bank of scheduled status after licence cancellation

The Reserve Bank of India confirmed that Paytm Payments Bank Ltd has been removed from the Second Schedule of the RBI Act, effectively ending its status as a scheduled bank. This follows the RBI’s April decision to cancel the bank’s licence, citing conduct detrimental to depositors and failure to meet regulatory norms. The bank had previously been prohibited from onboarding new customers in March 2022 and faced further limits on deposits and top-ups in early 2024.

The Delhi High Court subsequently ordered the winding up of the institution. The exclusion removes the bank’s access to privileges reserved for scheduled banks, such as certain clearing facilities. Paytm Payments Bank is an associate of fintech firm Paytm, founded by Vijay Shekhar Sharma, highlighting heightened regulatory scrutiny of digital-banking ventures in India.