RBI removes Paytm Payments Bank from the list of scheduled banks; here’s what the matter is about..
The Reserve Bank of India (RBI) has removed Paytm Payments Bank Limited (PPBL) from the list of scheduled banks. This move follows the cancellation of the bank's license. The RBI had cancelled Paytm Payments Bank's banking license in April 2026.
Why was this decision taken?
While cancelling the license on April 24, 2026, the RBI stated that the interests of depositors were being adversely affected by the bank's operations and management. According to the central bank, the bank had also failed to comply with license conditions and banking regulations. Subsequently, the process of winding down Paytm Payments Bank's banking operations moved forward. The RBI had even filed an application with the High Court to close the bank.
RBI action was already underway
The RBI's action against Paytm Payments Bank did not happen suddenly. The central bank had imposed several business restrictions on the bank in January 2024. Later, customers were permitted to withdraw their available balances, but new deposits, credit transactions, and various banking services were prohibited. The RBI had implemented restrictions on several of the bank's services starting March 2024. Following this, the role of other partner banks in Paytm's payments business increased.
What does removal from the scheduled bank list mean?
A scheduled bank is one that is included in the Second Schedule of the RBI Act, 1934. Such banks receive certain facilities from the RBI, such as loans at the bank rate, and also gain membership to clearing houses.
The removal of Paytm Payments Bank from this list is part of the regulatory process following the cancellation of its banking license. This means that PPBL is no longer a scheduled bank conducting general banking activities.
What is the impact on customers and Paytm users?
Paytm Payments Bank and Paytm's payment services should not be considered the same thing. Several services of the Paytm app may continue through partner banks and other financial institutions. The RBI had already clarified that customers would be permitted to withdraw or utilize the available balances in their Paytm Payments Bank accounts. Meanwhile, following the process of revoking the bank's license, the primary focus is now on winding down operations and settling obligations to depositors. The Delhi High Court had also ordered the closure of Paytm Payments Bank and appointed an official liquidator.
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