Delhi High Court orders winding up of Paytm Payments Bank

What the Record Shows

The High Court of Delhi ordered the winding up of Paytm Payments Bank Limited (PPBL) on 8 July 2026, read with a clarificatory order of 22 July 2026, under the Banking Regulation Act, 1949 read with the provisions of the Companies Act, 2013. The order followed a petition by the Reserve Bank of India under Sections 38 and 39 of the Banking Regulation Act. Shri Girikumar M Nair, a former Chief General Manager of the State Bank of India, took charge as Official Liquidator, with all powers of the Board, with effect from 8 July 2026. The RBI announced the winding up in a press release dated 28 July 2026.

The winding up is the end point of a supervisory process that began more than two years earlier. By an order dated 31 January 2024, the RBI, acting under Section 35A of the Banking Regulation Act, directed PPBL to stop accepting deposits, top-ups and credit transactions in any customer account, prepaid instrument, wallet, FASTag or National Common Mobility Card. The regulator then cancelled the bank's licence under Section 22(4) of the Act with effect from 24 April 2026 before moving the High Court for winding up.

Throughout, the RBI's action was against PPBL as a regulated entity. Its orders do not name any individual as having committed an offence, and there is no criminal conviction in this matter. The RBI has publicly treated the payments bank separately from other entities in the wider group, and this report is confined to what the RBI and the Delhi High Court actually did.

How It Worked

The RBI's stated basis for the January 2024 restriction was persistent non-compliance and continued material supervisory concerns at the bank, which it said were revealed by a comprehensive system audit and a subsequent compliance validation report by external auditors. Per the RBI's public reasoning, the concerns were system-level and compliance-related, centred on areas such as know-your-customer and technology controls in a bank operating one of India's largest prepaid-instrument books, rather than on any single named transaction.

The restriction was deliberately structured to protect customers' access to their own money while stopping fresh inflows. The order directed that no further deposits, credit transactions or top-ups be allowed in accounts, wallets, FASTags or NCMC cards, while providing that withdrawal or utilisation of balances by customers be "permitted without any restrictions, upto their available balance". The initial cut-off of 29 February 2024 was later extended to 15 March 2024; in an accompanying set of frequently asked questions, the RBI said customers might require "a little more time to make alternative arrangements" and cited the larger public interest.

The escalation that followed ran through the statutory ladder of banking supervision. The Section 35A direction is a corrective power to protect depositors and the public. When the concerns were not resolved to the regulator's satisfaction, the RBI cancelled the licence under Section 22(4), which removes the authorisation to carry on banking business. With the licence gone, the RBI petitioned the High Court under Sections 38 and 39 to wind the company up and to appoint a liquidator, which the court did on 8 July 2026. The appointment of an Official Liquidator with all the powers of the Board means the company's affairs are now administered under the court's supervision rather than by its own management.

Who Lost Money

No customer lost the balance held in their PPBL account, wallet or prepaid instrument as a result of the RBI's action. From the outset the RBI ring-fenced existing balances: customers were allowed to withdraw or use their money without restriction up to the available balance, and that protection was maintained as the deadlines were extended. The action stopped new money coming in; it did not freeze money already there.

The practical cost fell on the tens of millions of wallet, FASTag and NCMC customers and the merchants who relied on the bank's rails, all of whom had to migrate to other providers within the timelines the RBI set. For everyday users this meant re-linking FASTags to a different issuer, moving wallet balances, and re-pointing merchant settlements, an operational disruption rather than a monetary loss.

With the company now in liquidation, the Official Liquidator takes charge of realising the bank's assets and settling claims under the Banking Regulation Act read with the Companies Act. Customers with residual balances or dues are dealt with through that court-supervised process. Where money is still to be returned, the position is that it is administered by the liquidator, not that it has been lost.

Where It Stands Now

As of the current record, PPBL is in liquidation. The licence stands cancelled from 24 April 2026, the Delhi High Court's winding-up order of 8 July 2026 (read with 22 July 2026) is in force, and Shri Girikumar M Nair is functioning as Official Liquidator with all powers of the Board from 8 July 2026. The bank no longer carries on banking business.

This is a supervisory and civil-court outcome, not a criminal one. There is no conviction of the company or of any individual arising from these orders, and the RBI's characterisation throughout has been of non-compliance and supervisory concern rather than of an offence. Customers and merchants have been directed to complete any pending migration and to route residual claims through the liquidation process. Readers should rely on the RBI's own notices and the Official Liquidator's communications for procedural steps and timelines, rather than on secondary summaries.

What It Means

The PPBL episode shows the full arc of banking supervision in India, from a corrective direction under Section 35A, through licence cancellation under Section 22(4), to court-ordered winding up under Sections 38 and 39. It is a reminder that a licence to accept public money is conditional on continuing compliance, and that the RBI's remedies escalate when concerns are not closed out. It is equally a reminder of what the action was not: there is no finding of fraud and no criminal conviction in these orders.

For an ordinary user, the concrete takeaway is about concentration and portability. Keeping day-to-day balances, FASTag and mobility cards with a single provider is convenient, but a regulatory action against that provider can force a scramble to move rails. Spreading essential utilities across more than one regulated provider, and keeping the bulk of savings in a separately insured bank account rather than in a wallet, limits the disruption if any one entity is restricted. The Oquilia enforcement archive tracks how these actions unfold, alongside related RBI restriction cases such as the four NBFCs barred over pricing and the Bajaj Finance disclosure halt.

FAQ

What did the Delhi High Court order?

On 8 July 2026, read with an order of 22 July 2026, the High Court of Delhi ordered that Paytm Payments Bank Limited be wound up under the Banking Regulation Act, 1949 read with the Companies Act, 2013, on a petition by the RBI under Sections 38 and 39. It appointed Shri Girikumar M Nair, a former Chief General Manager of the State Bank of India, as Official Liquidator with all powers of the Board.

Did the RBI find PPBL guilty of fraud or a criminal offence?

No. The RBI's orders were supervisory, taken under the Banking Regulation Act. The RBI's stated basis was persistent non-compliance and material supervisory concerns, not a criminal offence. There is no criminal conviction of the company or of any individual arising from these orders.

Were customer balances lost?

No. From the January 2024 order onward, the RBI allowed customers to withdraw or use their existing balances without restriction. The restriction stopped fresh deposits, top-ups and credit transactions; it did not freeze money already in accounts, wallets, FASTags or NCMC cards.

Why did the RBI cancel the licence?

The RBI cancelled PPBL's banking licence under Section 22(4) of the Banking Regulation Act with effect from 24 April 2026 after its supervisory concerns were not resolved to its satisfaction, following the earlier Section 35A restriction of 31 January 2024. Cancellation removes the authorisation to carry on banking business.

What happens to customers now?

The bank is in liquidation and its affairs are administered by the Official Liquidator under the court's supervision. Customers and merchants were directed to migrate to other providers, and any residual balances or claims are dealt with through the liquidation process. The RBI's notices and the liquidator's communications set out the steps.

Where can I read the official record?

The RBI's press release on the winding up dated 28 July 2026 and its action of 31 January 2024 under Section 35A are published on rbi.org.in and are linked below.

This report is based on the RBI press release on the winding up of Paytm Payments Bank dated 28 July 2026 and the RBI action against Paytm Payments Bank under Section 35A, reviewed on 31 July 2026.