Central bank cites regulatory violations and depositor interest concerns, initiates process to shut down operations

The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited, marking a major regulatory action against one of India’s prominent digital banking entities. The decision came into effect from the close of business on April 24, 2026.

With the licence revoked, the bank is no longer permitted to carry out any banking activities, including accepting deposits or offering services defined under banking laws. The RBI has also said it will approach the High Court to initiate the process of winding up the bank.

Reasons behind RBI action

The central bank cited multiple serious concerns in its order. It stated that the affairs of the bank were conducted in a manner detrimental to the interests of depositors and the broader public. Additionally, the management practices were found to be prejudicial to depositor interests.

The RBI further noted that the bank failed to comply with conditions attached to its payments bank licence, and allowing it to continue operations would not serve any public interest.

Long history of regulatory issues

The latest move comes after prolonged regulatory scrutiny. Earlier, in January 2024, the RBI had already barred Paytm Payments Bank from accepting fresh deposits due to non-compliance issues, including lapses in customer due diligence, fund usage, and technology systems.

Over time, restrictions tightened as the bank failed to address regulatory concerns, ultimately leading to the cancellation of its licence.

What happens to customers

Despite the shutdown process, the RBI has indicated that the bank has sufficient liquidity to repay its depositors during the winding-up phase.

Customers are expected to be able to withdraw their existing funds, although the bank will not be allowed to continue normal banking operations going forward.

Impact on fintech sector

The cancellation of Paytm Payments Bank’s licence is being seen as one of the strongest regulatory actions in India’s fintech space. It signals stricter enforcement of compliance norms and could have wider implications for digital banking and payments companies operating under similar frameworks.

West Bengal Chief Minister Mamata Banerjee has made a strong political statement during the ongoing West Bengal assembly elections 2026, saying her party will aim for a larger role at the national level after securing victory in the state.

Addressing a rally, Banerjee said that once her party wins the Bengal elections, it will move forward to “take over Delhi,” indicating a broader political strategy beyond the state. The remark comes at a time when campaigning has intensified across constituencies.

Her statement is being seen as part of a wider push by the Trinamool Congress to position itself as a key force against the Bharatiya Janata Party at the national level.

Banerjee has repeatedly expressed confidence that her party will return to power in West Bengal, aiming for another consecutive term.

Political context

The West Bengal elections have witnessed aggressive campaigning from both the ruling Trinamool Congress and the BJP. Leaders from both sides have exchanged sharp remarks, highlighting the high-stakes nature of the contest.

Banerjee’s latest comment adds to her earlier calls for opposition unity and signals her intent to expand political influence beyond the state. Similar remarks in recent weeks have indicated that her party sees the Bengal result as a stepping stone toward a larger national role.

At the same time, BJP leaders have projected confidence about their performance in the elections, further intensifying the political contest.

High-stakes election

The 2026 West Bengal assembly elections are crucial for both parties, with the Trinamool Congress seeking to retain power and the BJP aiming to make significant inroads in the state.

Banerjee’s “Delhi” remark underscores the broader national implications of the election, as regional parties increasingly position themselves in the national political landscape.

The Gauhati High Court has rejected the anticipatory bail plea filed by Congress leader Pawan Khera in connection with a criminal case registered in Assam.

The case stems from a complaint filed by Riniki Bhuyan Sarma, wife of Assam Chief Minister Himanta Biswa Sarma, following remarks made by Khera earlier this month.

A single-judge bench heard arguments from both sides earlier this week and reserved its order before delivering the verdict on Friday. With the rejection of anticipatory bail, Khera no longer has protection from arrest in the case.

Background of the case

The FIR against Pawan Khera was lodged after he made allegations during a press conference on April 5, claiming that the Chief Minister’s wife possessed multiple passports and undisclosed overseas assets.

Following these statements, legal proceedings were initiated in Assam, invoking multiple charges including defamation, cheating, and forgery.

Arguments in court

During the hearing, Khera’s legal team argued that the case was politically motivated and that arrest was not necessary, asserting that he was not a flight risk.

On the other hand, the Assam government opposed the plea, stating that the case involved serious offences beyond simple defamation and required custodial investigation.

Supreme Court’s earlier stance

Before approaching the Gauhati High Court, Khera had sought protection from arrest from the Supreme Court. However, the apex court declined to extend relief and directed him to approach the appropriate court in Assam.

What happens next

With the High Court denying anticipatory bail, the legal proceedings against Khera are set to continue, and he may now face arrest depending on the course of the investigation.

The case has also triggered political reactions, adding to tensions between the Congress and the Assam government.