Mumbai.
In a final formalization of regulatory action against Paytm Payments Bank Limited (PPBL), the Reserve Bank of India (RBI) officially removed the entity from the Second Schedule to the Reserve Bank of India Act, 1934. The notification—originally dated July 31, 2026, and gazetted on September 7—was made public in an official announcement by the central bank.
This exclusion officially ends PPBL’s status as a scheduled bank, marking the end of a multi-year regulatory enforcement process that included customer onboarding freezes, business operational restrictions, banking license cancellation, and a liquidation order by the Delhi High Court.
What Does Removal from the Second Schedule Mean?
Under Indian banking regulations, a scheduled bank is an institution listed under the Second Schedule to the Reserve Bank of India Act, 1934. Inclusion in this list requires a bank to meet stringent financial capital norms and regulatory safeguards. In return, the bank receives:
- Direct access to RBI liquidity facilities (such as bank rate loans and repurchase facilities).
- Automated clearinghouse and interbank clearing membership.
When the RBI removes Paytm Payments Bank from this list, it formally revokes all remaining institutional privileges. Because PPBL’s banking license was revoked earlier over non-compliance and systemic supervisory concerns, stripping its scheduled bank status is the administrative prerequisite for completing its court-directed winding-up and liquidation phase.
Key Impacts on Everyday Customers & App Users
The regulatory action target is strictly Paytm Payments Bank Limited (PPBL)—a banking entity—not the parent technology ecosystem. Here is how the transition affects everyday transactions:
| Feature / Service | Status | Operational Details |
| Paytm UPI Payments | Fully Active | Functions normally using third-party banking partners (Axis Bank, HDFC Bank, SBI, YES Bank). |
| Paytm App Recharges & Bills | Fully Active | Utility bill payments, mobile recharges, and DTH options operate without change. |
| Merchant QR & Soundbox | Fully Active | Merchant settlement accounts were migrated away from PPBL to partner banks in early 2024. |
| Paytm Money & Wealth | Fully Active | Mutual funds, stock trading, NPS, and Paytm Gold operate through separate SEBI-regulated entities. |
| PPBL Wallet & Account Balances | Restricted / Refund Phase | New deposits or top-ups remain barred. Existing funds are being returned through the liquidator. |
UPI & App Services Remain Safe
The core Paytm application is owned and operated by One97 Communications Limited (OCL), not PPBL. In early 2024, OCL migrated its Unified Payments Interface (UPI) system to a Multi-Bank Provider (TPAP) arrangement. When you make a UPI transaction on Paytm today, the underlying settlement is routed through partner banks such as State Bank of India, HDFC Bank, Axis Bank, or YES Bank—making the service independent of PPBL.
Timeline of Regulatory Actions against PPBL
[March 2022] RBI bars PPBL from onboarding new customers over supervisory concerns.
│
▼
[January–February 2024] Restrictions placed on accepting fresh deposits, credits, or wallet top-ups.
│
▼
[April 2024] Banking license formally cancelled; Delhi HC orders winding-up.
│
▼
[July 31, 2026] RBI issues formal notification removing PPBL from the Second Schedule.
│
▼
[October 7–8, 2026] RBI publicly publishes the exclusion order; app services continue smoothly.
Frequently Asked Questions (FAQ)
Q1: Is the Paytm app shutting down after this RBI order?
No. The Paytm application is operated by One97 Communications Ltd and relies on external partner banks for payments. It is not shutting down and remains fully operational for UPI, bill payments, and recharges.
Q2: What happens if I still have money inside a Paytm Payments Bank account or Wallet?
The RBI has assured that PPBL holds sufficient liquid asset buffers to honor and pay back remaining customer deposit liabilities. These payouts and balance withdrawals are handled under court-monitored liquidation guidelines.
Q3: Can I add money to my Paytm Wallet?
No. Paytm Payments Bank Wallets cannot accept fresh top-ups or deposits following the business restrictions imposed in early 2024.
Q4: Does this affect my investments on Paytm Money or Mutual Funds?
No. Paytm Money Limited is an independent SEBI-registered stockbroking and investment platform. Securities, stocks, and mutual funds are held in SEBI-regulated depositories (CDSL/NSDL) and have no operational connection to PPBL’s scheduled bank status.
Disclaimer
This article is published for informational and educational purposes only. It does not constitute formal financial or legal advice. Regulatory updates regarding banking operations are subject to official releases from the Reserve Bank of India (RBI) and judicial orders.
For more coverage visit Bharat Kaalvrutt.
