RBI Cancels Paytm Payments Bank Licence; Rs 800 Crore of Customer Funds Still Stuck

The Reserve Bank of India (RBI) has officially cancelled Paytm Payments Bank’s banking licence from April 24, 2026. This means the bank is no longer allowed to carry out any banking activities. The decision was taken under banking laws to protect customers and in the public interest.

The action came after a long regulatory process that started with restrictions on the bank’s operations and was delayed to ensure proper legal procedures were followed.

Even though the bank stopped normal operations nearly two years ago, more than Rs 800 crore of customer money is still stuck. Around Rs 400 crore is in frozen accounts, and another Rs 400 crore remains unclaimed. The RBI had repeatedly asked customers to withdraw their money and extended deadlines, but there has been very little reduction in these amounts. Earlier, the bank held over Rs 5,500 crore in deposits and had about 35 crore accounts, though many of them were inactive or had compliance issues.

The RBI has said that the bank has enough money to repay all customers. However, the repayments can only happen after a court-supervised winding-up process is completed. Since this process is being handled by the High Court, it may take time depending on legal procedures. Because of this, customers are unsure about when they will get their money back.

Paytm’s parent company, One97 Communications, has stated that it does not have financial exposure to the payments bank and that both operate separately. After earlier restrictions, Paytm had already shifted its payment services to other banking partners. When the licence cancellation was announced, One97’s stock price fell by about 20%. However, some experts believe the company could benefit in the long run if it applies for and receives other types of financial licences.