Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of ‘banking’ or any additional business with immediate effect and RBI will make an application for winding up of the bank before the High Court.
Paytm Payments Bank has enough liquidity to repay its entire deposit liability upon winding up of the bank, RBI said in a statement.
RBI cancelled the licence of Paytm Payments Bank citing that the affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors.
The general character of the management of the bank was prejudicial to the interest of depositors as also the public interest, it added.
No useful purpose or public interest would be served by allowing the bank to continue. The bank failed to comply with the conditions stipulated in the payments bank licene issued to it, thereby violating the provisions, the RBI said.
The bank was earlier directed to stop onboarding of new customers with effect from 11 March 2022. Thereafter, on 31 January 2024 and 16 February 2024, certain business restrictions were also imposed on the bank which, inter alia, disallowed any further deposits/credits/ top-ups in existing customer accounts, pre-paid instruments, wallets, etc.
