Banking – Delhi High Court Orders Closure of Paytm Payments Bank After RBI Action
Banking –The Delhi High Court has formally ordered the winding up of Paytm Payments Bank Limited (PPBL), bringing the lender’s closure process to its final legal stage after the Reserve Bank of India (RBI) revoked its banking licence over continued regulatory lapses. The move follows the central bank’s earlier decision that the institution had failed to meet essential compliance standards, prompting legal proceedings for its dissolution.
Delhi High Court Approves Winding-Up Process
According to a statement issued by the RBI on Tuesday, the Delhi High Court passed orders on July 8 and July 22, 2026, directing that Paytm Payments Bank be wound up under the provisions of the Banking Regulation Act, 1949, along with the applicable sections of the Companies Act, 2013.
The court’s decision represents the final legal step in shutting down the bank after months of regulatory action. The RBI said the winding-up process is now being carried out under judicial supervision in accordance with existing banking and corporate laws.
Official Liquidator Takes Charge
As part of the court’s order, Girikumar M. Nair, a former Chief General Manager of the State Bank of India, has been appointed as the Official Liquidator for Paytm Payments Bank.
The RBI stated that the Official Liquidator has been granted all statutory powers available under the Banking Regulation Act and the Companies Act to oversee the liquidation proceedings. These powers include managing the bank’s affairs, handling its assets, and carrying out responsibilities required under the court’s directions.
The central bank also confirmed that, effective July 8, 2026, the Official Liquidator assumed all powers previously exercised by the bank’s Board of Directors. As a result, the board no longer retains authority over the institution’s operations or administrative decisions.
RBI Explains the Legal Framework
The RBI noted that the appointment of the Official Liquidator ensures the liquidation process is conducted in line with the legal framework governing banking companies in India. The authority granted by the court allows the liquidator to perform all duties necessary for completing the bank’s closure while complying with statutory requirements.
The central bank reiterated that the court’s orders authorize the liquidator to exercise every power required under both relevant Acts, ensuring an orderly transition throughout the winding-up process.
Licence Cancellation Led to Final Closure
The High Court’s order follows the RBI’s decision in April 2026 to cancel Paytm Payments Bank’s banking licence after identifying what it described as persistent non-compliance with regulatory norms.
At the time, the central bank had stated that the bank’s operations were being conducted in a manner that was not in the best interests of its depositors. Based on those findings, the RBI announced that it would seek permission from the Delhi High Court to initiate winding-up proceedings.
With the court now approving the liquidation, the process has entered its final legal phase under the supervision of the appointed Official Liquidator.
Regulatory Oversight Remains Central
The closure of Paytm Payments Bank underscores the importance of regulatory compliance within India’s banking sector. The RBI has consistently maintained that licensed financial institutions are required to follow prudential norms and governance standards designed to safeguard depositors and preserve confidence in the financial system.
The court-approved winding-up process is expected to proceed under the supervision of the Official Liquidator in accordance with the applicable provisions of Indian banking and corporate law.