Paytm Payments Bank Faces Wind-Up After HC Order

The Delhi High Court has ordered the winding up of Paytm Payments Bank Ltd (PPBL), bringing the lender closer to closure after the Reserve Bank of India (RBI) revoked its banking licence earlier this year for regulatory violations.

The RBI in a statement on Tuesday said the High Court in orders dated July 8 and July 22 directed that PPBL be wound up under the Banking Regulation Act, 1949 and the Companies Act, 2013.

The court has appointed Girikumar M. Nair, former Chief General Manager of the State Bank of India as the Official Liquidator for overseeing the winding-up process.

The RBI said that the Official Liquidator has been empowered to exercise all powers available under the Banking Regulation Act and relevant provisions of the Companies Act. He has also been exercising the powers of the board of the bank since July 8.

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Closure Process:

The winding-up order follows the cancellation of Paytm Payments Bank’s banking licence by the RBI in April 2026 for repeated non-compliance of regulatory requirements. The central bank said the bank was being run in a manner prejudicial to the interests of depositors and announced it would apply for a winding-up order before the Delhi High Court.

Paytm Payments Bank did not oppose the RBI’s petition, court documents show. The bank’s board approved a voluntary winding up in principle on April 25 following the licence cancellation, while shareholders passed a special resolution consenting to the process as directed by or with the permission of the regulator.

The board decided that no proposal or representation be made before the Reserve Bank of India and this was conveyed to the central bank in writing two days thereafter on June 14.

Justice Anish Dayal has admitted the RBI’s petition under Sections 38 and 39 of the Banking Regulation Act for the appointment of Nair as the Official Liquidator, the bank not having raised any objection.

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Regulatory Crackdown:

The court also accepted the RBI's suggestion for paying ₹5.5 lakh to the liquidator as remuneration from the company's realised funds and asked him to submit a preliminary report within two months. The case has been listed for further hearing on 17.09.

Paytm Payments Bank has had regulatory issues for the past few years. The RBI, in March 2022, had barred the bank from onboarding new customers after supervisory concerns were flagged and also ordered a complete audit of its IT systems.

In January and February 2024, the regulator imposed additional restrictions, including a ban on new deposits, loans and replenishment of customer accounts, prepaid instruments and wallets. These measures were followed by the cancellation of the bank’s banking licence in April 2026 and the latest winding-up order by the Delhi High Court.