In a hard blow to One97 Communications, the parent firm of Paytm, the Reserve Bank of India has scrapped the banking licence of Paytm Payments Bank (PPBL). The share price slumped nearly 8% in early trade.

The banking regulator said the licence issued to PPBL under the Banking Regulation Act stands cancelled with effect from the close of business on April 24.

In an order dated April 24, the lender of last resort said the entity is prohibited from carrying on the business of banking with immediate effect.

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RBI cancels licence to Payments Bank

The Paytm Payments Bank will apply for the winding up of the bank before the High Court. The RBI added that the company has enough liquidity to repay its entire deposit liabilities upon winding up.

This is not the first time the RBI has taken such action. Before this, on March 11, 2022, PPBL had already been directed to stop onboarding new customers.

Later, the RBI imposed additional business limitations that prohibited new deposits, credits, and additional funding in current customer accounts, as well as in prepaid instruments and wallets.

“No useful purpose or public interest would be served by allowing the bank to continue as envisaged in Section 22 (3) (e) of the BR Act,” RBI said in a press note. It noted that Paytm Payments Bank failed to comply with the conditions stipulated in the Payments Bank license issued to it.

Paytm share price performance

The share price of One97 Communications has fallen 1.6% in the last five trading days. However, the stock has given a return of 14% in the past one month. It has fallen almost 12% in the last six months. Paytm’s stock price has given a return of 31% over the last 1 year.

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Paytm Q3FY26

The company reported a net profit of Rs 225 crore for the third quarter of FY26, compared with a loss of Rs 208 crore posted a year back. Its revenue increased 20% year-on-year (YoY) to Rs 2,194 crore in Q3 FY26, compared with Rs 1,828 crore a year ago. 

The company’s payment services revenue increased 21% YoY to Rs 1,284 crore, while net payment revenue grew 25% to Rs 613 crore.