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The Reserve Bank of India cancelled the banking licence of Paytm Payments Bank Limited, connected Friday, ceasing its operations arsenic a bank, effectual from April 24. "The Reserve Bank of India (RBI) has cancelled the banking licence issued to Paytm Payments Bank Limited nether Section 22(4) of the Banking Regulation Act, 1949 (‘BR Act’) effectual from adjacent of concern connected April 24, 2026," RBI said successful its order.This means the slope tin nary longer transportation retired immoderate ‘banking’ activities arsenic defined nether the law, nor immoderate different related business, with contiguous effect. "Consequently, Paytm Payments Bank Limited is prohibited from conducting the concern of 'banking' arsenic defined successful Section 5(b) oregon immoderate further concern specified nether Section 6 of the Banking Regulation Act, 1949 with contiguous effect."The cardinal slope volition present attack the High Court to statesman the process of winding up the bank.
It added that the slope presently has capable liquidity to repay each its depositors erstwhile the winding-up process starts. "Paytm Payments Bank Limited has capable liquidity to repay its full deposit liability upon winding up of the bank."Here's wherefore RBI revoked the licence:(i) RBI stated, successful its order, the bank’s operations were carried retired successful a mode that harmed its ain interests arsenic good arsenic those of its depositors, starring to non-compliance with Section 22 (3) (b) of the BR Act.
(ii) The wide behaviour of the bank’s absorption was recovered to beryllium against the interests of depositors and the public, resulting successful a breach of Section 22 (3) (c) of the BR Act. (iii) Allowing the slope to proceed operations would not service immoderate utile intent oregon nationalist interest, arsenic outlined nether Section 22 (3) (e) of the BR Act. (iv) The slope did not conscionable the conditions acceptable nether its Payments Bank licence, thereby violating Section 22 (3) (g) of the BR Act.This determination follows earlier restrictions connected the slope erstwhile it was ordered to halt adding caller customers from March 11, 2022. Later, connected January 31, 2024 and February 16, 2024, the RBI barred immoderate caller deposits, credits oregon top-ups successful lawsuit accounts, prepaid instruments and wallets.
