Paytm Payments Bank Barred from Banking Operations by RBI

Restrictions Tightened on PPBL Since 2022 Order

The regulator's action on the bank began in 2022 with regulatory restrictions and got tightened further in 2024 with recurrent supervision concerns on governance, compliance and operations being pointed out.
There were various grounds that led the RBI to cancel the banking license, such as conduct of the affairs of the bank being detrimental to the interest of the lender and its depositors and character of its management being prejudicial to depositors and public interest. 

Despite the lender continuing to be operational, its activities are restricted to loan referrals and withdrawals of existing deposits through its banking correspondents. Fresh deposits are restricted.

Paytm Clarifies No Business Exposure to PPBL

India’s top payments app, Paytm announced on Friday that the regulatory action initiated by Reserve Bank of India against Paytm Payments Bank Ltd (PPBL) will not have any financial or business implications.
In a filing to the stock exchanges, the fintech firm clarified that it has not undertaken any material business relationships or exposures with PPBL, since the bank is operating with no board or management representation.

No Impact on Paytm App or UPI Services

Paytm said that operations remain unaffected, as its investment in Paytm Payments Bank Ltd was already fully impaired as of March 31, 2024.
It emphasized that none of its services is dependent on PPBL, which ensures that all platforms - including Paytm app, UPI, card machines, Payment Gateway, and Paytm Money - will continue to function as usual. Paytm added that the issue pertains to PPBL alone.