Delhi High Court orders winding up of Paytm Payments Bank after RBI licence cancellation
- Delhi High Court orders winding up of Paytm Payments Bank
- Order follows cancellation of banking licence by RBI
- Court appoints liquidator to oversee the winding up process
Court orders winding up
The Delhi High Court has ordered the winding up of Paytm Payments Bank Ltd. The order comes months after the Reserve Bank of India cancelled the bank's licence over regulatory concerns.
A division bench passed the order in a petition filed by the RBI. The central bank had approached the court after it revoked the bank's licence, citing persistent non-compliance with banking norms.
Licence cancellation and regulatory action
The RBI had cancelled Paytm Payments Bank's licence earlier this year. The central bank cited material supervisory concerns and non-compliance with regulatory requirements as reasons for the action.
Sources said the bank had failed to meet key compliance deadlines. The RBI had issued multiple warnings before taking the extreme step.
Liquidator appointed
The High Court has appointed a liquidator to oversee the winding up process. The liquidator will manage the bank's assets and liabilities.
Depositors are expected to get their money back through the deposit insurance scheme. The Deposit Insurance and Credit Guarantee Corporation (DICGC) covers deposits up to Rs 5 lakh per account.
The court has directed the liquidator to ensure a fair and orderly process. All stakeholders, including employees and creditors, will be given due consideration.
Impact on customers and business
Paytm Payments Bank had millions of customers across India. The winding up order will affect current account holders and merchants using the bank's services.
The company behind the bank, One97 Communications, has said it will cooperate with the court's order. It has already shifted many services to other banking partners to minimise disruption.
Industry experts said the move signals the RBI's strict stance on regulatory compliance. Banks and payment firms have been put on notice.
The case is being closely watched by the fintech sector. It is one of the most high-profile banking licence cancellations in recent years.
What happens next: The liquidator will begin the process of realising assets and paying off depositors and creditors. The RBI will monitor the winding up process to ensure depositors are protected.