The court docket has appointed Girikumar M. Nair, former Chief Basic Supervisor of the State Financial institution of India (SBI), because the Official Liquidator of the financial institution. Underneath the court docket’s instructions, the Official Liquidator has been vested with all powers prescribed below the Banking Regulation Act and the relevant provisions of the Corporations Act. The RBI mentioned that, with impact from July 8, 2026, the liquidator has been exercising all of the powers of PPBL’s board.
RBI had cancelled licence in April
The winding-up order follows the RBI’s determination on April 24, 2026, to cancel Paytm Funds Financial institution’s banking licence below Part 22(4) of the Banking Regulation Act, 1949. On the time, the central financial institution had mentioned the financial institution’s affairs have been being performed in a fashion detrimental to the pursuits of its depositors and introduced that it might strategy the Delhi Excessive Courtroom for winding up the financial institution.
The RBI had additionally acknowledged that it had filed the winding-up utility earlier than the Excessive Courtroom below Sections 38 and 39 of the Banking Regulation Act whereas recommending the appointment of Girikumar M. Nair because the liquidator.
Regulatory scrutiny through the years
Paytm Funds Financial institution, an affiliate of Vijay Shekhar Sharma-led fintech firm Paytm, had been below regulatory scrutiny for a number of years earlier than the cancellation of its licence.
In March 2022, the RBI barred the financial institution from onboarding new prospects after figuring out materials supervisory issues and directed it to nominate an exterior IT audit agency to conduct a complete evaluation of its know-how programs.
The regulatory motion intensified in January and February 2024, when the RBI imposed further restrictions, stopping the financial institution from accepting contemporary deposits, credit and top-ups in buyer financial savings accounts, pay as you go devices, FASTags and wallets. These measures have been launched after the central financial institution flagged persistent compliance deficiencies and governance issues.
When revoking the licence earlier this yr, the RBI mentioned the financial institution’s operations have been being carried out in a fashion detrimental not solely to its personal pursuits but additionally to these of its depositors.
