In a sweeping regulatory action that has raised concerns among millions of digital payments users, the Reserve Bank of India has cancelled the banking licence of Paytm Payments Bank Limited with effect from the close of business on April 24, 2026. The central bank cited persistent non-compliance with licensing conditions and flagged serious concerns over the bank’s functioning, stating that its operations were detrimental to the interests of depositors. However, in a parallel reassurance, One 97 Communications Limited said its core services – including Paytm app, UPI, QR, Soundbox and payment gateway – will continue to operate uninterrupted, ensuring that day-to-day transactions for users remain largely unaffected.

The RBI made it clear that the action was not sudden but followed continued regulatory lapses. According to the central bank, Paytm Payments Bank failed to comply with conditions stipulated under its payments bank licence.

In its statement, the RBI said the bank’s affairs were conducted in a manner “detrimental to the interest of its depositors” and also raised concerns about public interest. It added that the overall character of the bank’s management was prejudicial, making it untenable to allow the bank to continue operations.

The regulator further noted that the bank was not complying with certain provisions of the Banking Regulation Act, 1949, effectively prohibiting it from carrying out any banking business with immediate effect.

For users worried about their deposits, the RBI has offered a clear assurance – your money is safe.

The central bank said Paytm Payments Bank has enough liquidity to repay its entire deposit liability as it undergoes winding up. This means:

• Depositors will be able to recover their funds
• There is no immediate risk to customer balances
• The repayment process will be overseen under regulatory supervision

This assurance is crucial in preventing panic among millions of wallet and account holders.

No – and this is where the distinction becomes important.

One 97 Communications Limited clarified that its services are not dependent on Paytm Payments Bank. In an exchange filing, the company said:

• Paytm app will continue to function normally
• UPI transactions will remain unaffected
• QR payments, Soundbox, card machines and payment gateway will operate as usual

The company emphasised that none of its services are in partnership with Paytm Payments Bank, and the bank operates independently without any shared management or board involvement.

In a key clarification to investors, One 97 Communications stated that it has no exposure to Paytm Payments Bank.

The company said it had already impaired its investment in the bank as of March 31, 2024. As a result, the latest RBI action does not have any direct financial impact on the listed entity.

It also reiterated that its broader ecosystem – including Paytm Money and Paytm Gold – remains fully operational and unaffected. Paytm Payments Bank had been under the RBI’s scanner for some time. Notably, in March 2022, the central bank barred it from onboarding new customers due to compliance concerns.

The latest move appears to be the culmination of ongoing supervisory issues, with the RBI ultimately deciding that continued operations were not in the interest of depositors or the financial system.

For most Paytm users, there is no immediate action required.

• Use Paytm for UPI payments
• Pay bills and recharge services
• Make merchant payments via QR codes