Paytm shares fell as much as 9.64% in intraday trading on Thursday, October 8, hitting a low of ₹1,565 against the previous closing price of ₹1,732 following the RBI's exclusion of Paytm Payments Bank Limited (PPBL) from the scheduled banks' list. The sharp decline reflects investor concerns over the formal removal of the payments bank's regulatory status. According to ET Now, the stock movement came after the Reserve Bank of India (RBI) officially removed Paytm Payments Bank from the list of recognised scheduled banks on 7 October 2026, as confirmed in an official statement. This action follows the central bank's cancellation of PPBL's banking licence in April 2023 for non-compliance with regulatory norms.
The Reserve Bank of India (RBI) officially removed Paytm Payments Bank (PPBL) from the list of recognised scheduled banks on 7 October 2026, as confirmed in an official statement. This action follows the central bank's cancellation of PPBL's banking licence in April 2023 for non-compliance with regulatory norms. According to the RBI statement, Paytm Payments Bank Limited has been excluded from the Second Schedule to the Reserve Bank of India Act, 1934 vide Notification DoR.LIC.No.S3674/16.13.215/2026-27 dated July 31, 2026 and published in the Gazette of India (Part III - Section 4) dated September 07, 2026. The official notification regarding this exclusion was initially issued on July 31, 2026 and published in the Gazette of India in September 2026. The Second Schedule of the RBI Act contains the list of banks recognised as 'scheduled banks', with inclusion subject to the bank meeting specified requirements and bringing certain regulatory and operational privileges.
The RBI had cancelled PPBL's banking licence in April 2023 after determining that the affairs of the bank were conducted in a manner detrimental to the interest of its depositors, as reported by ET Now. The bank had been directed to stop onboarding new customers with effect from March 11, 2022 amid material supervisory concerns, and was also required to appoint an information technology (IT) audit firm to conduct a comprehensive system audit of its IT system. The regulatory action escalated in early 2024 when the RBI imposed business restrictions on January 31, 2024, which were subsequently modified through an order dated February 16, 2024. Among other measures, the bank was barred from accepting further deposits or credits, including through top-ups, in customer accounts, prepaid instruments and wallets, which significantly curtailed the banking operations of PPBL and followed the RBI's assessment of persistent compliance and supervisory issues. The latest development follows earlier regulatory action against PPBL, including the cancellation of its banking licence effective April 24, 2026, over serious regulatory violations.
The Delhi High Court (HC) ordered that Paytm Payments Bank Ltd (PPBL) be wound up following the RBI's regulatory action, as reported by ET Now. Earlier, the Delhi High Court ordered the winding up of PPBL and appointed former State Bank of India (SBI) Chief General Manager Girikumar M Nair as the Official Liquidator, the RBI confirmed on July 28, 2026. The High Court, through orders dated July 8, 2026, and July 22, 2026, directed that PPBL be wound up under the provisions of the Banking Regulation Act, 1949, read with the Companies Act, 2013. With the banking licence cancelled and the entity now removed from the Second Schedule, the RBI's latest notification formally reflects the bank's changed regulatory status. The Second Schedule of the RBI Act represents the official list of recognised banks that meet the central bank's stringent financial standards and receive special operational privileges, with 'scheduled bank' meaning a bank included in this schedule.
Despite the banking licence cancellation, RBI confirmed in April that customer money remains safe as the bank has sufficient liquidity to repay its entire deposit liability upon winding up, according to ET Now. Customers can continue using the Paytm App for UPI, recharges, and payments as before. Following the RBI action, One97 Communications confirmed it has no exposure to PPBL as it had already impaired its investment in the beleaguered entity as of March 31, 2024. The company clarified that key services including Paytm app, Paytm UPI, Paytm QR, Soundbox, card machines and Payment Gateway will continue to operate uninterrupted despite regulatory action against PPBL. The company also confirmed that Paytm Gold and Paytm Money remained unaffected by the banking licence cancellation. PPBL, an associate entity of Vijay Shekhar Sharma-led One97 Communications (Paytm), has faced repeated regulatory intervention over the past few years.
