RBI wins Paytm Bank battle
The High Court of Delhi has ordered that Paytm Payments Bank Limited (PPBL) be wound up, the Reserve Bank said on Tuesday. In April this year, the Reserve Bank of India (RBI) had cancelled the banking licence issued to PPBL for non-compliance with norms, saying the affairs of the bank were conducted in a manner detrimental to the interest of its depositors.
The central bank also announced it would be making an application for winding up of the bank before the High Court. Girikumar M Nair, former CGM of State Bank of India, was appointed as liquidator of PPBL.
“By an Order dated July 08, 2026 read with the Order dated July 22, 2026, the Hon’ble High Court of Delhi has ordered that PPBL be wound up under the provisions of the Banking Regulation Act, 1949 read with the provisions of the Companies Act, 2013,” it said.
Further, the High Court appointed Nair as the Official Liquidator of PPBL.
As per the Order, the RBI said the official liquidator shall exercise all the powers prescribed under the provisions of the Banking Regulation Act, 1949 along with applicable provisions of the Companies Act, 2013.
In terms of the said Order, the official liquidator, with effect from July 8, 2026, shall exercise all the powers of the Board of PPBL, it added.
PPBL, an associate firm of Vijay Shekhar Sharma-promoted fintech firm Paytm, came under the regulatory scanner on multiple occasions earlier, including in March 2022 when the central bank barred it from onboarding new customers.
While cancelling the licence, the RBI had said the affairs of the bank were conducted in a manner detrimental to its own interests as well as its depositors.
Earlier, PPBL was directed to stop onboarding new customers with effect from March 11, 2022 amid “material supervisory concerns” observed in the bank. The bank was also directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.
Thereafter, on January 31, 2024 and February 16, 2024, certain business restrictions were also imposed on the bank, including disallowing any further deposits/credits/ top-ups in existing customer accounts, prepaid instruments, and wallets.
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