RBI Cancels Licence of This Payments Bank; Stock Declines 5%

One 97 Communications’ share price was trading at Rs 1,016 at 10:16 AM on April 27, 2026, sharply down from the previous close of Rs 1,147.35. This decline comes despite a positive broader market, with the Nifty 50 trading at 24,100.70, up 0.84 per cent from its previous close of 23,897.95.

RBI Cancels Licence, Orders Wind-Up
In a major regulatory action, the Reserve Bank of India, through its order dated April 24, 2026, has cancelled the banking licence of Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949.

The cancellation is effective from the close of business on April 24, 2026. As a result, the bank is immediately prohibited from carrying out any banking activities as defined under Section 5(b) of the Act, or any additional activities under Section 6.

The regulator has also confirmed that it will file an application before the High Court to initiate the winding-up process of the bank.

Key Reasons for Licence Cancellation
The central bank outlined multiple reasons for this stringent action: 
1.The bank’s affairs were conducted in a manner detrimental to the interests of both the institution and its depositors, violating Section 22(3)(b) of the Act.
2.The overall management was found to be prejudicial to depositor and public interest, breaching Section 22(3)(c). 
3.The regulator concluded that allowing the bank to continue operations would not serve any useful purpose or public interest, as per Section 22(3)(e).
4.The bank failed to comply with licensing conditions, violating Section 22(3)(g) of the Act.

Earlier Regulatory Actions
This move follows a series of prior restrictions imposed by the regulator:
1.The bank was directed to stop onboarding new customers from March 11, 2022.
2.On January 31, 2024 and February 16, 2024, further restrictions were imposed. These included a ban on fresh deposits, credits, and top-ups in customer accounts, prepaid instruments, and wallets.

Despite these measures, compliance concerns persisted, ultimately leading to licence cancellation.

Liquidity Position and Depositor Safety
The bank has stated that it has adequate liquidity to repay its entire deposit liabilities during the winding-up process. This is expected to ensure that depositors are not adversely impacted from a repayment standpoint.

About the Company
One 97 Communications, incorporated in 2000, operates one of India’s largest digital ecosystems, serving over 333 million users and more than 21 million merchants. The company offers a wide range of services including payments, financial solutions, and commerce platforms.

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Disclaimer: This article is for informational purposes only and not investment advice.