RBI Axes Paytm Payments Bank from Elite List, Solidifying Winding-Up Proceedings

India's central bank, the Reserve Bank of India (RBI), has formally removed Paytm Payments Bank Limited (PPBL) from its list of 'scheduled bank', a significant regulatory step that officially closes a chapter of repeated non-compliance and legal actions. This decision, announced on October 7, 2026, follows the RBI cancellation of PPBL banking licence in April and a subsequent Delhi High Court order for the bank's 'winding up' in July. The move solidifies a long-standing regulatory crackdown on PPBL, which faced 'supervisory concerns' as early as March 2022, leading to restrictions on onboarding new customers and accepting fresh deposits. The RBI had cited 'serious regulatory violations' and operations that were 'detrimental to the interests of depositors' as key reasons for its actions against the Payments Bank. While this formally ends PPBL status, the broader Paytm ecosystem, managed by One97 Communications, has clarified that core services like UPI payments through the Paytm app remain unaffected as they operate via a multi-bank model, having already ended material business arrangements with PPBL by March 2024. With PPBL now formally excluded from the Second Schedule, the focus shifts entirely to the ongoing 'winding up' process, overseen by the appointed Official Liquidator, Girikumar M Nair. Customers who had funds specifically with Paytm Payments Bank are assured by the RBI that the bank possesses 'enough liquidity to repay its entire deposit liability' during this process. This final regulatory action serves as a strong signal to the Indian financial technology sector about the central bank's firm stance on compliance and depositor protection.