RBI formally delists Paytm Payments Bank from scheduled banks register

The RBI confirmed on Wednesday that Paytm Payments Bank Limited (PPBL) has been excluded from the Second Schedule to the Reserve Bank of India Act, 1934, which maintains the official register of banks meeting the central bank's regulatory and financial standards. A formal notification to this effect was published on July 31, with the gazette notification appearing in September.

The delisting marks the final administrative step in the closure of the payments bank, which faced regulatory action from the RBI over governance failures. In April this year, the central bank cancelled PPBL's banking licence, citing non-compliance with regulatory norms and stating that the bank's operations had been conducted in a manner detrimental to depositor interests.

Following the licence cancellation, the Delhi High Court subsequently ordered the formal winding up of the entity. Inclusion in the Second Schedule of the RBI Act is a statutory requirement for banks operating in India, granting them recognition as scheduled banks and access to central bank facilities and operational privileges.

Paytm Payments Bank, which operated as a digital payments platform, had emerged as a prominent fintech player in India's evolving banking sector before running afoul of regulatory requirements. The closure represents a significant setback in the country's ongoing experiment with specialised banking licences for non-traditional financial service providers.