Shares of
One 97 Communications Ltd, the parent of Paytm
, are likely to be in focus on Monday after the Reserve Bank of India (RBI) cancelled the banking licence of its associate entity, Paytm Payments Bank Ltd (PPBL). On Friday, Paytm shares closed 1.1% lower at ₹1,147.10 on the BSE, with a market capitalisation of ₹73,427 crore.
In an exchange filing, Paytm said there will be no direct financial impact from the move, as the fintech major has no exposure to, or any material business arrangements with, PPBL. The payments bank is a joint venture between Vijay Shekhar Sharma, founder and chief executive officer of Paytm, who holds a 51% stake, and One97 Communications Ltd, which owns the remaining 49%.
According to the company, it had already impaired its investment in PPBL as of March 31, 2024, and therefore the RBI’s decision does not affect its financials. “As previously disclosed on March 1, 2024, the company does not have any exposure to PPBL or any material business arrangements with PPBL. No services provided by the company are in partnership with PPBL.”
The release noted that PPBL operates independently, with no board or management involvement from the company.
It also stated that One 97 Communications was informed by PPBL on April 24 that the central bank, via a press release issued the same day, had cancelled the payments bank’s licence with effect from the close of business on April 24, 2026.
The company further reassured users and merchants that its platform will continue to operate without disruption. Its core offerings—including the Paytm app, UPI services, Paytm Gold, and merchant solutions such as QR codes, Soundbox devices, and card machines—remain fully functional. Other services, including its payment gateway and wealth management platform, Paytm Money, will also continue as usual.
The licence has been cancelled under Section 22(4) of the Banking Regulation Act, 1949. Following the order, Paytm Payments Bank has been prohibited from conducting the business of banking, or any other activities permitted under the Act, with immediate effect. The apex bank also intends to approach the High Court to initiate the winding-up process for the bank.
The central bank said the payments bank’s affairs were conducted in a manner “detrimental to the interests of the bank and its depositors.” It also noted that the “general character of the management of the bank is prejudicial to the interests of depositors as well as the public interest.”
The RBI’s action marks a significant regulatory step for PPBL, which has been under scrutiny over the past few years. On March 11, 2022, the RBI directed Paytm Payments Bank to stop onboarding new customers with immediate effect. On January 31, 2024, the regulator imposed major business restrictions on the bank, citing persistent non-compliance and supervisory concerns.