Delhi High Court Orders Winding Up of Paytm Payments Bank, Former SBI CGM Appointed Liquidator
The Delhi High Court has officially ordered the winding up of Paytm Payments Bank Limited (PPBL), effectively marking the end of the road for the embattled digital bank. This significant legal development comes just months after the Reserve Bank of India (RBI) took the drastic step of cancelling PPBL's banking license in April 2026, citing persistent and material supervisory concerns.
Through direct orders dated July 8 and July 22, 2026, the Delhi High Court mandated that PPBL be wound up under the stringent provisions of the Banking Regulation Act, 1949, read in conjunction with the Companies Act, 2013.
Official Liquidator Appointed to Oversee Closure
To manage the complex liquidation process, the High Court has appointed Mr Girikumar M. Nair, a former Chief General Manager of the State Bank of India (SBI), as the Official Liquidator.
Since July 8, Nair has been legally vested with all the powers of the bank’s board of directors. His primary mandate is to oversee the orderly closure of the bank, which includes the fair settlement of all outstanding liabilities and the crucial task of returning money to the remaining depositors under the court's supervision.
The RBI's Case Against PPBL
The winding-up order is the culmination of a process initiated by the RBI. Following the license cancellation on April 24, the central bank approached the Delhi High Court to commence the liquidation formally.
The regulator presented a strong case, emphasising several critical reasons for the closure:
Persistent Non-Compliance: The RBI cited long-standing and serious concerns regarding PPBL's continuous failure to comply with established banking rules and regulatory supervision.
Detrimental Operations: The RBI explicitly stated that the bank's affairs were being conducted in a manner that was deeply harmful to the interests of both the bank itself and, more importantly, its depositors.
Management Attitude: The regulator highlighted that the general attitude of PPBL's management was adversarial to depositors and the broader public interest.
The RBI also assured the court and the public that PPBL possessed sufficient liquidity (cash and easily convertible assets) to repay all its deposit liabilities during the winding-up process comfortably.
A Timeline of Regulatory Action
The final closure follows a series of escalating regulatory restrictions placed on PPBL over the years:
March 2022: The RBI barred PPBL from onboarding any new customers due to "material supervisory concerns."
January & February 2024: Regulatory actions intensified dramatically. The RBI imposed severe restrictions, barring the bank from accepting any fresh deposits, credit transactions, or top-ups in customer accounts, wallets, FASTags, and other prepaid instruments after March 15, 2024.
April 2026: The RBI officially cancelled PPBL's banking license under Section 22(4) of the Banking Regulation Act, 1949.
Note: It is important to clarify that this specific closure order applies exclusively to Paytm Payments Bank Limited. It won't automatically stop or affect other digital payment services in the Paytm app, as long as those services use compliant third-party banking partners.
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