India court orders winding up of Paytm Payments Bank after RBI licence cancellation
- 'The affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors,' RBI says
MUMBAI: India’s central bank said on Tuesday that the Delhi High Court has ordered the winding up of Paytm Payments Bank and appointed a former State Bank of India executive as the official liquidator, marking the final step in the closure of the payments bank following a prolonged regulatory crackdown.
The Reserve Bank of India had cancelled the banking licence of Paytm Payments Bank on April 24 and subsequently approached the court seeking winding-up proceedings and the appointment of a liquidator.
“The affairs of the bank were conducted in a manner detrimental to the interest of the bank and its depositors,” the RBI said at the time.
Girikumar M. Nair will oversee the liquidation process and exercise all the powers of the bank’s board with effect from July 8, the RBI said.
Paytm Payments Bank was once India’s largest payments bank and a key part of the country’s digital payments ecosystem after receiving a licence in 2015.
India’s central bank cancels Paytm Payments Bank licence
A payments banks is a type of lender in India that is allowed to accept deposits but not extend loans.
Paytm Payments Bank, backed by digital payments firm One 97 Communications, came under increasing regulatory scrutiny in March 2022 after the RBI ordered the bank to stop onboarding new customers, citing supervisory concerns.
In January 2024, the RBI barred the bank from accepting fresh deposits due to persistent non-compliance issues.
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