Mumbai, April 24 : The Reserve Bank of India on Friday cancelled the licence of Paytm Payments Bank Limited, citing failure to comply with the regulatory conditions laid down under its payments bank licence.

In a decisive move, the central bank said the entity would no longer be permitted to carry out banking operations and announced that it will approach the High Court to initiate the process of winding up the bank.

â??RBI has cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 (â??BR Actâ??) effective from close of business on April 24,â?? the central bank said in its order.

â??Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of â??bankingâ?? as defined in Section 5(b) or any additional business specified under Section 6 of the Banking Regulation Act, 1949 with immediate effect,â?? RBI added.

RBI will make an application for winding up of the bank before the High Court, it mentioned.

The RBI noted that Paytm Payments Bank has adequate liquidity to repay all its deposit liabilities, assuring that depositorsâ?? interests would be safeguarded during the closure process.

â??Paytm Payments Bank Limited has enough liquidity to repay its entire deposit liability upon winding up of the bank,â?? the central bank said.

It further stated that allowing the bank to continue operations would serve no useful purpose or public interest.

â??No useful purpose or public interest would be served by allowing the bank to continue as envisaged in Section 22 (3) (e) of the BR Act,â?? RBI said.

â??The bank failed to comply with the conditions stipulated in the Payments Bank license issued to it, thereby violating the provisions of Section 22 (3)(g) of the BR Act,â?? the central bank stated.

Previously, the bank was directed to stop onboarding of new customers with effect from March 11, 2022.

Thereafter, on January 31, 2024, and February 16, 2024, certain business restrictions were also imposed on the bank which, inter alia, disallowed any further deposits/credits/ top-ups in existing customer accounts, prepaid instruments, wallets, etc, RBI said.

/IANS