The Delhi High Court has ordered the winding up of Paytm Payments Bank Ltd (PPBL), marking the formal commencement of liquidation proceedings nearly three months after Reserve Bank of India (RBI) cancelled the Bank's licence over persistent regulatory violations and governance concerns.
In a statement issued on Tuesday, RBI said the High Court, through orders on 8th July and 22 July 2026, directed that Paytm Payments Bank be wound up under the provisions of the Banking Regulation Act, 1949 read with the Companies Act, 2013.
The Court has appointed Girikumar M Nair, former chief general manager (CGM) of State Bank of India (SBI), as the official liquidator of the Bank. Under the Court's order, Mr Nair has assumed all powers of the board of Paytm Payments Bank effective from 8 July 2026, and will exercise powers prescribed under the Banking Regulation Act and the applicable provisions of the Companies Act.
At the time, the central bank had said it would initiate winding-up proceedings before the Delhi High Court under Sections 38 and 39 of the Banking Regulation Act and sought the appointment of Mr Nair as the liquidator.
RBI had stated that the licence was cancelled after finding that the Bank's affairs were being conducted in a manner 'detrimental to the interest of the bank and its depositors' and that the 'general character of its management' was prejudicial to public interest.
The banking regulator had also concluded that Paytm Payments Bank had failed to comply with licensing conditions and that allowing it to continue banking operations would serve no useful purpose.
While announcing the licence cancellation in April, RBI had assured customers that Paytm Payments Bank possessed adequate liquidity to repay all deposit liabilities during the winding-up process.
The cancellation marked the culmination of a series of regulatory actions imposed on the payments bank over several years following repeated supervisory concerns over compliance and governance standards.
Following RBI's action in April, One 97 Communications Ltd, which operates the Paytm brand, had clarified that the decision would have no financial or operational impact on the listed company.
The company informed stock exchanges that Paytm Payments Bank operated as an associate entity with an independent board and management, and that it had already impaired its investment in the bank.
One 97 Communications had also maintained that there would be no disruption to its core digital payments ecosystem, including the Paytm app, unified payments interface (UPI) services, QR code payments, Soundbox devices, card machines, payment gateway operations and financial services offerings.
According to the company, it had already migrated its banking operations to partner banks and no longer had any material business arrangements with Paytm Payments Bank.
The payments bank had undergone significant governance changes in early 2024, including the resignation of founder Vijay Shekhar Sharma as non-executive chairman and board member. The board was subsequently reconstituted with independent directors and experienced banking professionals in an effort to address regulatory concerns.
However, those measures failed to satisfy the regulator, ultimately resulting in the cancellation of the banking licence.
The winding-up order effectively brings an end to one of India's most prominent payments bank ventures. Once a key player in digital wallets and FASTag services, Paytm Payments Bank had already seen its business significantly curtailed following earlier RBI restrictions, prompting Paytm to shift its payments business to other banking partners.
With the High Court's order now in force, the official liquidator will oversee the orderly liquidation of the Bank, including repayment of depositors and completion of statutory processes under the Banking Regulation Act and the Companies Act.
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