Paytm shares fall 8% after RBI cancels PPBL licence

What triggered the sell-off in One 97 Communications

Shares of One 97 Communications, the company behind the Paytm brand, fell sharply on Monday after the Reserve Bank of India (RBI) cancelled the banking licence of Paytm Payments Bank Limited (PPBL). The stock dropped as much as about 8% in early trade, reflecting fresh investor caution around regulatory risk. The move formally ends PPBL’s ability to carry out banking business in India. Paytm later said PPBL’s board and shareholders have approved resolutions to wind up the bank. The parent company also reiterated that its consumer and merchant products continue to operate without interruption. The development follows more than two years of regulatory scrutiny and restrictions on PPBL.

RBI cancels Paytm Payments Bank’s licence, effective April 24, 2026

The RBI said the cancellation came into effect from the close of business on April 24, 2026. It added that PPBL is prohibited from conducting the business of “banking” and any additional business specified under the Banking Regulation Act, 1949, with immediate effect. The regulator said it will make an application to the High Court to initiate winding-up proceedings. The RBI’s statement cited issues related to depositor interest and the broader public interest. It also said the bank had failed to comply with key licensing requirements under the Banking Regulation Act, including provisions referenced under Section 22.

Compliance and governance concerns highlighted by the regulator

In its explanation, the RBI said the bank’s operations were conducted in a manner “detrimental” to the bank and its depositors. It also said the general character of the bank’s management was prejudicial to depositors and public interest. The regulator stated that “no useful purpose or public interest would be served” by allowing the bank to continue. Among the cited lapses were compliance issues around customer due diligence and governance. Separate reports also referenced concerns earlier flagged around the use of funds and technology infrastructure. The cancellation is the strongest action taken in a long sequence of restrictions against the payments bank.

Paytm’s clarification: no exposure, no partnership services

In an exchange filing, Paytm said it does not have any exposure to PPBL and provides no services in partnership with it. It also said PPBL operates independently, with no overlap in board structure, and no board or management involvement from One 97 Communications. The company added that there is “no direct financial impact” on One 97 Communications because it had already impaired its investment in PPBL as of March 31, 2024. Another disclosure in the same set of reports stated the investment impaired was ₹227 crore as of the end of FY2023-24. Paytm also said its services have been operating without interruption and will continue to operate uninterrupted. It listed products including the Paytm app, Paytm UPI, Paytm Gold, Paytm QR, Paytm Soundbox, Paytm Card Machines, Paytm Payment Gateway and Paytm Money.

Winding up of PPBL and the associate-company relationship

Paytm said that, following RBI’s action, PPBL’s board of directors and shareholders approved resolutions needed to enable winding up. The company also stated that the winding up of PPBL and the consequential cessation of the associate relationship are not expected to have any material impact on its business, operations, or financial condition. A regulatory filing dated April 25 noted that, once the winding-up order becomes effective, PPBL shall cease to be an associate company within the meaning of the Companies Act, 2013 and applicable SEBI listing regulations. The payments bank is described as a joint venture where founder and CEO Vijay Shekhar Sharma holds 51% and One 97 Communications holds 49%. The regulatory process now moves to the High Court, as stated by RBI.

Stock price action: intraday lows and key levels

The shares of One 97 Communications fell as much as about 8% to the day’s lows around ₹1,056-₹1,057 on the NSE in Monday’s session, according to different market updates. One report said the stock was trading at ₹1,071.10 at 9:23 am on April 27, down 6.65% for the day. It opened at ₹1,084.95, touched a high of ₹1,097.45 and a low of ₹1,056.05 in the session so far. Another market update cited an intraday low of ₹1,051.10, down 8.5%, and said that by 10 am the stock was at around ₹1,085 with 7.4 million shares changing hands on the NSE. Over the past year, the stock has touched a 52-week high of ₹1,381.80 and a 52-week low of ₹808.00. Separately, Paytm shares were reported to have closed 1.1% lower at ₹1,147.10 on the BSE on Friday, with market capitalisation of ₹73,427 crore.

Depositors and customers: RBI flags liquidity, Paytm cites continuity

The RBI said PPBL has enough liquidity to repay its entire deposit liability upon winding up of the bank. That line is intended to address depositor concerns as the winding-up process begins. From Paytm’s side, the company’s emphasis has been on continuity of the Paytm app and payments and merchant services that sit outside the payments bank. Paytm’s filings repeatedly stated that its services continue to operate without interruption. The regulatory prohibition applies to PPBL conducting banking business, while the parent company positions the broader Paytm platform as continuing. Any further operational details for PPBL will depend on the winding-up process initiated through the High Court.

Broker views: “incrementally negative”, but ratings remain

Bernstein said the RBI decision is likely to be incrementally negative for Paytm’s parent. At the same time, Bernstein said the development could clear the way for Paytm to apply for an NBFC or PPI licence, which might enable it to offer certain payment products such as wallet and credit products. Goldman Sachs maintained a “Buy” rating but reduced its target price to ₹1,400 from ₹1,470. Goldman said the cancellation is an incremental negative even as it sees no direct financial impact on Paytm, as reported. The revised target price was described as implying an upside potential of nearly 31% from the stock’s previous closing price.

How the situation built up: licence history and prior curbs

PPBL received a limited banking licence in August 2015 that allowed it to take small deposits but not give out loans. The regulatory actions against the bank intensified over time. Reports noted that PPBL was barred from onboarding new customers with effect from March 11, 2022. Separately, restrictions in 2024 included a ban on fresh deposits, described in multiple updates as part of continued supervisory action. The cancellation in April 2026 is now framed by RBI as the endpoint of repeated compliance issues and concerns around governance and depositor interest.

Key facts at a glance

Market impact and what to watch next

The immediate market impact has been visible in the sharp intraday fall and heightened volumes, even as Paytm argues the financial hit has already been accounted for through impairment. The bigger near-term variables are procedural and regulatory: the High Court winding-up process referenced by RBI, and the timeline for how PPBL’s liabilities are repaid, given the regulator’s statement on sufficient liquidity. For One 97 Communications, investors will likely focus on how quickly the company can reduce uncertainty around the associate-entity exit and what that means for disclosures going forward. Broker commentary also points to a second track, where Paytm may pursue alternate regulatory permissions such as an NBFC or PPI licence, though no application outcome is confirmed in the reports. Any further clarity is expected through future filings and regulator-led updates tied to the winding-up proceedings.

Conclusion

RBI’s cancellation of Paytm Payments Bank’s licence, effective April 24, 2026, triggered a sharp fall in One 97 Communications shares, even as Paytm said its core services continue uninterrupted. The next concrete steps are the High Court winding-up process and subsequent disclosures on how PPBL’s closure is executed.