Delhi High Court orders winding up of Paytm Payments Bank

MUMBAI: The final transaction on Paytm Payments Bank’s ledger is now being written in court. The Delhi High Court has ordered the winding up of Paytm Payments Bank Ltd (PPBL), moving the lender a significant step closer to closure after the Reserve Bank of India (RBI) revoked its banking licence earlier this year over regulatory violations.

In a statement issued on Tuesday, the RBI said the High Court, through orders dated 8 July and 22 July, directed that PPBL be wound up under the Banking Regulation Act, 1949 and the Companies Act, 2013.

The court appointed Girikumar M. Nair, former Chief General Manager at the State Bank of India, as the Official Liquidator to oversee the process.

According to the RBI, the Official Liquidator has been authorised to exercise all powers available under the Banking Regulation Act and the relevant provisions of the Companies Act. The central bank added that Nair has also been exercising the powers of PPBL’s board since 8 July.

The winding-up order follows the RBI’s decision in April 2026 to cancel the bank’s licence after citing repeated non-compliance with regulatory requirements. At the time, the regulator said PPBL’s affairs were being conducted in a manner detrimental to depositors and announced that it would seek a winding-up order from the Delhi High Court.

Court records show that Paytm Payments Bank did not oppose the RBI’s petition. Following the licence cancellation, the bank’s board approved voluntary winding up in principle on 25 April, while shareholders subsequently passed a special resolution consenting to the process in line with the regulator’s directions.

On 14 June, the board resolved not to make any proposal or representation before the RBI, with the decision formally communicated to the central bank two days later.

Justice Anish Dayal accepted the RBI’s petition under Sections 38 and 39 of the Banking Regulation Act and appointed Nair as the Official Liquidator without objection from the bank. The court also approved the RBI’s proposal to pay the liquidator Rs 5.5 lakh from the company’s realised funds and directed him to submit a preliminary report within two months. The next hearing has been scheduled for 17 September.

Paytm Payments Bank had been under increasing regulatory scrutiny for several years. In March 2022, the RBI barred the bank from onboarding new customers after identifying supervisory concerns and ordered a comprehensive audit of its IT systems. The regulator tightened restrictions further in January and February 2024, prohibiting fresh deposits, credits and top-ups in customer accounts, prepaid instruments and wallets before ultimately revoking the bank’s licence in April 2026.

The High Court’s order marks a decisive milestone in the bank’s regulatory journey, formally shifting the focus from enforcement to liquidation and bringing one of India’s most closely watched banking interventions closer to its conclusion.