Delhi HC Orders Winding Up Of Paytm Payments Bank
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Months after getting its banking licence revoked, Paytm Payments Bank (PPBL) has been served an order by the Delhi High Court (HC) to wind down its operations completely.
In an order passed last week, the HC directed Paytm’s practically defunct banking arm to liquidate, as applicable under the Banking Regulation Act. The HC appointed ex-SBI Payment Services MD and CEO Girikumar M. Nari as the official liquidator to oversee the process.
This follows the RBI’s cancellation of PPBL’s banking licence in April, a decision that was enacted about two years after the apex bank ordered it to stop accepting fresh deposits or adding funds to existing accounts, wallets and prepaid instruments.
At the time of the licence cancellation, the central bank said the bank had enough liquidity to repay all depositors during the winding up process and that the action would not impact customer interests.
The RBI also moved the Delhi HC to initiate the wind down proceedings, which has now culminated in the court’s order.
What triggered RBI’s action on PPBL due to persistent regulatory non-compliance, severe KYC (Know Your Customer) lapses, and poor internal governance that posed risks to depositors
The cancellation followed a series of regulatory actions against PPBL. In March 2022, the RBI barred Paytm Payments Bank from onboarding new customers.
In early 2024, it further prohibited the bank from accepting fresh deposits or allowing customers to add funds to accounts, wallets and prepaid payment instruments, effectively bringing its banking operations to a halt.
Following the regulatory curbs, Paytm migrated its core digital payments business away from the payments bank. It now offers UPI services through partner banks, including Axis Bank, HDFC Bank and SBI, under the third-party application provider (TPAP) model after receiving approval from the NPCI in 2024.
The company has also been working to rebuild parts of the ecosystem that were impacted by the action against PPBL. A critical element of its business was the impact on Paytm Wallet, which became inactive following regulatory restrictions.
Now, Paytm, via its subsidiary Paytm Payments Services Ltd (PPSL), has applied for a prepaid payment instrument (PPI) licence to relaunch the wallet business.
During its Q1 FY27 earnings call, the company reiterated that reviving the wallet remains a key part of its consumer payments strategy, although it did not provide an update on the regulatory approval process.
On the financial front, Paytm reported a consolidated net profit of ₹220 Cr, up 78.8% YoY, while operating revenue rose 27.6% to ₹2,448 Cr.
Shares of Paytm ended today’s trading session 1.54% higher at ₹1,308.90.
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