The Reserve Bank of India formally notified the exclusion of Paytm Payments Bank Limited from the Second Schedule to the Reserve Bank of India Act, 1934. The formal gazette exclusion represents the culmination of regulatory enforcement actions initiated earlier over persistent supervisory non-compliance and material deficiencies in know-your-customer verification processes.
By revoking its scheduled bank status, the banking regulator completed the winding-down phase of the entity’s commercial deposit-taking and payment gateway operations. The central bank clarified that customer balances previously transitioned to partner commercial institutions remain safe, and the action does not impair the standalone operational license of the third-party Paytm UPI consumer application.
Financial sector observers pointed out that the scheduled status removal formalizes the fintech entity’s separation from the formal clearing and liquidity borrowing mechanisms provided to scheduled commercial banks. Regulators reiterated that strict statutory adherence to prudential norms remains non-negotiable for all financial technology ventures operating in India’s banking domain.
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Sources:
https://www.aajtak.in/india/news/story/aaj-ki-taza-khabar-8-october-2026-morning-top-news-headlines-ntc-dskc-2664467-2026-10-08