The Reserve Bank of India (RBI) has cancelled Paytm Payments Bank's license with effect from April 24, 2026. With this, all banking operations of the bank will come to an end with immediate effect. Although the RBI will approach the High Court for legal action to close the bank, the central bank has made it clear that the bank currently has sufficient funds to return all deposits to customers.

The RBI's strict action was taken citing practices that were detrimental to the depositors and the institution, management practices that were against the public interest, and violation of the payments bank license conditions. The cancellation of the license comes in continuation of the stringent restrictions imposed by the RBI in 2022 and 2024, prohibiting the addition of new customers and acceptance of new deposits.

Despite the closure of Payments Bank, Paytm's UPI payment services continue uninterrupted through partnerships with other banks like Axis Bank, HDFC, and SBI (TPAP model). Paytm's parent company, which has recovered from losses in previous years, is now making good financial progress by reporting a net profit of Rs 225 crore in the third quarter of this financial year.