INDIA'S CENTRAL BANK CANCELS PAYTM PAYMENTS BANK LICENSE

The RBI cited violations of banking regulations as the reason for revoking the licence. The central bank had previously restricted Paytm Payments Bank's operations in January 2024 due to the company's failure to meet regulatory standards. Paytm Payments Bank, a subsidiary of fintech company One97 Communications, had been operating as a payments bank since its launch. The licence cancellation marks a significant setback for the digital payments company, which has faced increased regulatory scrutiny. Payments banks in India are limited-service banking entities that can accept deposits and offer remittance services but cannot provide loans or credit facilities. The RBI's action underscores the regulator's commitment to enforcing compliance standards across the banking sector. The cancellation requires Paytm Payments Bank to cease all banking operations. Customers will need to transition their accounts and services to other banking providers.