India’s central bank said on Friday it has cancelled the banking licence issued to Paytm Payments Bank Limited, more than two years after the regulator imposed business curbs over violations, including lapses in customer due diligence.
Backed by One 97 Communications, which once counted China’s Ant Group and Japan’s SoftBank as investors, Paytm had obtained a limited banking license in August 2015 that allowed it to take small deposits but not give out loans.
In January 2024, the Reserve Bank of India ordered the bank to stop accepting fresh deposits due to what it said at the time was non-compliance with rules, including those on customer due diligence, use of funds, and technology infrastructure.
The RBI said on Friday it would make an application for the winding up of the bank before the high court.
While the bank remains operational, its activities are severely limited to processing withdrawals of existing deposits and facilitating loan referrals through banking correspondents, according to its website. It cannot take fresh deposits.
Reuters
