RBI Removes Paytm Payments Bank from List of Scheduled Banks

Paytm Payments Bank Limited (PPBL) has been removed in a scheduled bank category by the Reserve Bank of India after the cancellation of the its licence due to non-compliance with the regulations. According to the statement of the RBI, PPBL has been excluded from the Second Schedule to the Reserve Bank of India Act, 1934. This development came after several regulatory actions against the bank, which included limitations on onboarding of new customers followed by deposit, credit, and top-up restrictions.

Exclusion of PPBL from Second Schedule of RBI Act

The current decision of the RBI marks the exclusion of Paytm Payments Bank from the Second Schedule of the Reserve Bank of India Act, 1934.

Second Schedule of the Reserve Bank of India Act contains the list of scheduled banks. The banks included in this schedule are called scheduled banks and enjoy scheduled-banks rights.

According to the RBI statement referred to in the source, the exclusion came as a result of cancelling of PPBL’s licence.

The above decision was notified on July 31, 2026, while the notification was published in the Gazette of India on September 2026.

RBI Has Revoked Licence of Paytm Payments Bank

RBI had cancelled the banking licence of Paytm Payments Bank in April 2026 owing to non-compliance with regulatory guidelines.

While revoking the licence, the central bank had noted that the affairs of the bank had been conducted in such a way that it was detrimental to the interests of the bank and its depositors.

The present exclusion from the Second Schedule is, thus, a follow-up regulatory move after the revocation of the banking licence.

Regulatory Action Taken Against Paytm Payments Bank

There have been many instances of regulatory action against Paytm Payments Bank before the revocation of its licence.

March 2022: No More New Customers

In March 2022, RBI had directed PPBL not to onboard any new customer from March 11, 2022.

This decision had come about after material supervisory concerns raised by RBI. PPBL was also ordered to engage an IT audit firm to conduct a thorough audit of their IT systems.

January-February 2024: Business Restrictions

Subsequently, the RBI put more restrictions on PPBL.

The bank was directed on January 31, 2024, and thereafter on February 16, 2024, not to accept any further deposit or credit, including topping up, into customers’ accounts and prepaid instruments and wallets.

These regulatory restrictions were among the series of steps which eventually resulted in the cancellation of the bank’s license.

Delhi High Court Orders Winding Up of PPBL

In the wake of regulatory steps by the RBI, the Delhi High Court has now ordered the winding up of Paytm Payments Bank Limited.

The winding up process is a completely different legal process from that of the RBI regulatory step of cancelling the license of the bank.

What is a Scheduled Bank?

Scheduled Bank refers to any bank that is listed in the Second Schedule of the Reserve Bank of India Act, 1934.

Second Schedule is, hence, a vital statute when it comes to determining whether a bank falls under the category of a scheduled bank as per RBI guidelines.

In case of queries on banking and financial system, it becomes vital to distinguish between a scheduled bank and non-scheduled bank as the former operates under the RBI guidelines.