RBI Withdraws Paytm Payments Bank Licence: What It Means For Your Account And UPI

The Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank with effect from April 24, 2026, which results in the end of its operations as a payments bank following extended regulatory action over compliance and governance issues.

The decision has been taken under Section 22(4) of the Banking Regulation Act, 1949, after which the entity is no longer permitted to carry on banking business. The RBI has also indicated that it will approach the High Court for winding-up proceedings. Now, as the license has been cancelled, consumers are concerned about their accounts, wallets and UPI-linked services.

Over the last few years, Paytm Payments Bank has been operating under increasing regulatory restrictions imposed by the Reserve Bank of India. The bank was first prevented from onboarding new customers in 2022, with further restrictions imposed in 2024 that limited deposits, wallet top-ups and other fundamental banking operations.

What it means for accounts, wallets and UPI

RBI stated that Paytm Payments Bank has sufficient liquidity to repay its entire deposit liability during the winding-up process. This shows that customer deposits are expected to be settled as part of the closure process.

Paytm has clarified that the regulatory action has no impact on its business or financial operations. It added that there is no material exposure or business arrangement with the payments bank, and both entities operate independently.

The company further said that its services, including the Paytm app, UPI, QR, Soundbox, card machines, payment gateway and Paytm Money, continue to function without disruption. It added that the regulatory action is limited to the payments bank and does not affect its broader operations.

UPI services remain active, but users may eventually need to switch their UPI linkage to another bank account.

Wallets linked to Paytm Payments Bank had already faced restrictions on fresh loading following earlier directions issued by the Reserve Bank of India. As per these curbs, users were not allowed to add new funds, whereas existing balances could continue to be used as per applicable conditions.

Users are advised to monitor updates and ensure their banking and UPI details are linked to another bank account.