RBI removes Paytm Payments Bank from scheduled banks list

The Reserve Bank of India has taken further action against Paytm Payments Bank by removing it from the list of scheduled banks, according to regulatory notifications. The delisting represents an escalation in the central bank's enforcement measures against the payments bank operator.

This action comes as Paytm Payments Bank faces multiple regulatory headwinds. The RBI had previously suspended the bank's license to conduct most banking operations and had imposed restrictions on the entity's activities in recent months.

The scheduled banks designation carries significance for banking institutions in India, as it determines eligibility for certain central bank facilities and regulatory privileges. The removal underscores the severity of the RBI's concerns regarding Paytm Payments Bank's compliance and operational standards.

Paytm, one of India's largest digital payment platforms, established the payments bank subsidiary to expand into formal banking services. However, the entity has struggled to meet regulatory expectations since its inception, facing repeated compliance issues that have drawn increasing scrutiny from financial regulators.

The RBI's latest action suggests the regulator is pursuing a firm stance on enforcing banking standards and consumer protection norms across the payments bank sector.