Delhi HC Directs Paytm Payments Bank to Wind Up in RBI-Initiated Proceedings

Paytm Payments Bank is being wound up per the Delhi High Court's ruling. A former officer from the State Bank of India was also named official liquidator by the court. As a result, this is the last stage in shutting down the payments bank after a protracted regulatory onslaught.

According to a statement released by the RBI on July 28, 2026, the High Court of Delhi has ordered the winding up of Paytm Payments Bank under the provisions of the Banking Regulation Act, 1949, read with the Companies Act, 2013, as per orders of July 8, 2026, and July 22, 2026, respectively.

Why RBI is Shutting Down PPB?

One 97 Communications, a digital payments company, owns Paytm Payments Bank (PPB), an affiliate firm of the Paytm app pushed by Vijay Shekhar Sharma. Following the RBI's March 2022 directive to the PPB to cease onboarding new customers, the bank was subject to heightened regulatory scrutiny on supervisory concerns. Because of ongoing problems with noncompliance, the RBI prevented the bank from taking new deposits in January 2024.

Finally, in March of that year, RBI requested that the bank be wound up. According to the regulator, Girikumar M. Nair, who was previously the top general manager of State Bank of India, has been designated as the official liquidator of the bank by the high court. It was also announced that beginning July 8, Nair will be in charge of the liquidation and will have full board authority over the bank.

The Reserve Bank of India (RBI) subsequently revoked Paytm Payments Bank's banking licence in April 2026 due to the bank's failure to adhere to regulations. According to RBI, the bank is acting in a way that hurts the interests of its depositors. In addition, RBI later went to court to have a liquidator appointed and to initiate winding-up procedures.

The Downfall of PPB

After obtaining a licence in 2015, Paytm Payments Bank became the biggest payments bank in the nation and an integral element of the digital payments ecosystem. Although they do not provide loans, a payments bank is able to take deposits. The Reserve Bank of India (RBI) previously said that the bank had sufficient liquid assets to cover its full deposit liability in the event of winding up.

Since it had already impaired its investment in Paytm Payments Bank by March 2024, One97 Communications claimed it had no exposure to the bank following the RBI's April action. The voluntary winding up was authorised in principle by the bank's board on April 25. The winding up was also approved by a special resolution issued by the shareholders. The bank stated its intention to present a proposal to the regulator in the interest of depositors when the RBI's case initially appeared before the High Court on May 29.

It was given eight weeks to do so by the Court. The board of directors of the bank, however, decided on June 14 to abstain from submitting any proposals or representations to the RBI. On June 16, the regulator was notified of this judgement, and the winding-up petition was subsequently granted by the court.