Summary of this article
Paytm shares tumbled as much as 8 per cent on April 27
Paytm shares fell after RBI cancelled license of its banking arm
Shares of Paytm’s parent company, One 97 Communications, fell as much as 8 per cent in intra-day trade on April 27, 2026, Monday. This comes in the wake of the announcement of the cancellation of the banking licence of Paytm Payments Bank (PPBL) by the Reserve Bank of India late evening on April 24, 2026, Friday, after the closure of the market for the weekend. The RBI’s decision effectively forced the shutdown of Paytm’s banking arm.
The regulatory action triggered sharp market reactions after the market opened today, reflecting investor concerns over regulatory risks and the company’s evolving business model. It has also raised questions about the fintech firm’s future.
At present, market sentiment remains cautious, with analysts closely watching how the company adapts to the loss of its payments bank. However, shares recovered to trade around 1.80 per cent down in the second half of the session at Rs 1,125.40 apiece, as the overall market sentiment was positive.
The RBI’s decision stems from persistent compliance lapses, governance issues, and concerns around depositor safety. RBI said in a release that allowing PPBL to continue operations was not in the public interest. Accordingly, the RBI’s decision led to a complete revocation of its licence under the Banking Regulation Act, 1949. In effect, PPBL can no longer carry out any banking activities and is set to be wound up, subject to regulatory processes.
Paytm has clarified that the shutdown of PPBL will not materially impact its core operations. The company said that its digital payments ecosystem—including Unified Payments Interface (UPI), wallet services, and merchant payments—operates independently of the payments bank and will continue without disruption. Over the past year, Paytm had already diversified its key services to partner banks, reducing reliance on PPBL.
Notably, customer funds remain safe, with the RBI clarifying that the payments bank has sufficient liquidity to repay all depositors during the winding-up process. Users can continue to access their balances and withdraw funds as required.
However, the closure of PPBL is seen as a reputational setback despite operational continuity. According to analysts, the regulatory action could make it more challenging for Paytm to secure future licences and may increase scrutiny of its business practices. Going forward, market participants will watch how Paytm restructures its financial services business and sustains without its banking arm.
“While Paytm has no role in the current management/board of PPBL, the harsh language in the RBI’s letter is concerning," brokerage firm Bernstein said in a note.
“Post the RBI restrictions on Paytm Payments Bank Limited (PPBL) in early 2024, the company did put in time and effort to terminate the interlinkages between PPBL and the core business, reconstitute the board, and take steps to potentially revive operations of the bank,” the note added.
