The Reserve Bank of India (RBI) has canceled the banking license issued to Paytm Payments Bank Ltd, more than two years after the regulator imposed business sanctions over violations including lapses in customer due diligence.
Backed by One97 Communications Ltd., which once counted China’s Ant Group and Japan’s SoftBank as investors, Paytm obtained a limited banking license in August 2015, which allowed it to take small deposits but not loans.
In January 2024, the Reserve Bank of India had ordered the bank to stop accepting new deposits due to non-compliance with regulations including customer due diligence, use of funds and technology infrastructure.
The RBI said on Friday that it will apply for closure of the bank before the High Court.
According to its website, while the bank is operational, its activities are limited to processing withdrawals of existing deposits and facilitating loan referrals through banking correspondents. It cannot take new deposits.
