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The Reserve Bank of India (RBI) is reportedly considering the cancellation of Paytm Payments Bank's license amid financial turmoil, according to a Moneycontrol report. The looming deadline of March 15 for ceasing business operations and settling transactions seems to have spurred this decision. Speaking anonymously, one source disclosed, "As of now, that's the intention," highlighting the growing concerns surrounding the fate of Paytm's payments bank. The RBI had directed the payments bank to settle all outstanding transactions and nodal accounts by March 15, with no further transactions allowed beyond this date. The potential license revocation stems from repeated non-compliance issues, prompting the RBI to impose significant business restrictions on the payments bank, effectively halting its operations by February 29.A final decision on the license cancellation is anticipated in the coming days, according to the sources. Sharma had little luck in Delhi on February 6. The Paytm founder met Minister of Finance Nirmala Sitharaman at around 4:30 in the evening. The finance secretary was also present at the meeting. According to sources, the finance minister told him that the regulator is looking at the matter, adding that the RBI has been investigating for 1.5 years and has waited patiently before taking any action, and they can’t take any action. The meeting lasted all of 10 minutes. The RBI on January 31 imposed major business restrictions on Paytm Payments Bank including accepting fresh deposits and doing credit transactions after February 29.The central bank said a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action. No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime, the RBI said. It, however, said the withdrawal or utilisation of balance by the customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. will be allowed without any restrictions till the available balance is exhausted. On March 11, 2023, the RBI barred Paytm Payments Bank from onboarding new customers. On February 6, the stock of One 97 Communications, the parent company of Paytm, close at Rs 463 on the National Stock Exchange, up 2.63 percent, after falling over 40 percent in the previous three session. The banking regulator found major irregularities in KYC, which exposed the customers, depositors, and wallet holders to serious risk. These include the absence of KYC for a very large number of customers (running into lakhs), PAN validation failures in lakhs of accounts, and single PAN for multiple customers. During its probe, the RBI also found that in thousands of cases, the same PAN was linked to more than 100 customers and in some cases to more than 1,000 customers. The it also found that the total value of transactions, running into crores of rupees, was beyond regulatory limits in minimum KYC pre-paid instruments, raising money-laundering concerns.

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