Delhi HC orders winding up of Paytm Payments Bank
What's the story
The Delhi High Court has ordered the closure of Paytm Payments Bank Limited (PPBL), a move initiated by the Reserve Bank of India (RBI) after the bank's failure to comply with regulatory norms. The RBI had canceled PPBL's banking license in April 2026, citing persistent non-compliance and detrimental conduct toward depositors' interests. Girikumar M Nair, former Chief General Manager at State Bank of India, has been appointed as the Official Liquidator for this process.
Legal proceedings
Court issues order under Banking Regulation, Companies Acts
After the license cancellation, the RBI had filed an application for PPBL's winding up before the High Court.
The court has now ordered that PPBL be wound up under provisions of both the Banking Regulation Act, 1949 and Companies Act, 2013.
The RBI said in a statement on Tuesday, "The Hon'ble High Court of Delhi has ordered that PPBL be wound up under the provisions of the Banking Regulation Act, 1949 read with the provisions of the Companies Act, 2013."
Liquidation authority
Official liquidator to exercise all powers prescribed
The High Court has given Nair the authority to exercise all powers prescribed under the provisions of both the Banking Regulation Act, 1949 and applicable provisions of Companies Act, 2013.
The RBI said in its statement that "the official liquidator shall exercise all the powers prescribed under the provisions of the Banking Regulation Act, 1949 along with applicable provisions of the Companies Act, 2013."
This means he will have full control over PPBL's operations during this winding up process.
Past violations
PPBL was barred from onboarding new customers in 2022
PPBL, an associate firm of Vijay Shekhar Sharma-promoted fintech firm Paytm, has been under the regulatory scanner on multiple occasions.
In March 2022, the RBI had barred it from onboarding new customers due to "material supervisory concerns."
The bank was also asked to appoint an IT audit firm for a comprehensive system audit of its IT system.