Source: The Hindu, Tags: 25 April 2026
Context: RBI cancels Paytm Payments Bank licence
RBI cancelled the licence of Paytm Payments Bank Ltd effective April 24, 2026 after sustained regulatory non-compliance; winding-up proceedings will follow.
Payments Banks
- Origin: Nachiket Mor Committee, 2013
- Purpose: Financial inclusion and low-cost digital payments
Model
Niche banks for deposits and payments, not full-service banking
Key Points
- Deposits up to ₹2 lakh per customer
- Savings/current accounts, UPI, remittances
- Debit/ATM cards allowed
- No lending or credit cards
- Funds largely invested in government securities
RBI Action Reasons + Legal Basis
RBI used Section 22(4), Banking Regulation Act, 1949.
Grounds
- Breach of licence conditions under Section 22
- Persistent non-compliance despite repeated directions
- KYC/AML lapses and weak due diligence
- Deficiencies in governance and internal controls
- Improper conduct of permissible banking activities under Sections 5(b) and 6
- Threat to depositors’ interest and public interest
Regulatory Trajectory
- 2022: Bar on new customers
- 2024: Operational restrictions
- 2026: Licence cancellation
