Current Context: On 7 October 2026, the Reserve Bank of India (RBI) announced that Paytm Payments Bank Limited (PPBL) had been removed from the Second Schedule to the RBI Act, 1934, meaning it is no longer classified as a scheduled bank. The move follows cancellation of PPBL’s banking licence in April 2026.
- What changed? RBI excluded Paytm Payments Bank Limited from the Second Schedule of the RBI Act, 1934 under Section 42(6)(b). A bank included in the Second Schedule is known as a scheduled bank.
- Important dates: RBI issued the exclusion notification on 31 July 2026; it was published in the Gazette of India in September 2026, and RBI publicly highlighted the removal on 7 October 2026.
- Why was PPBL removed? RBI had already cancelled its banking licence on 24 April 2026 for regulatory non-compliance, including concerns that its affairs were being conducted in a manner detrimental to depositors and that it had failed to comply with conditions of its payments-bank licence.
- Effect of licence cancellation: From the close of business on 24 April 2026, PPBL was prohibited from carrying on the business of banking under the Banking Regulation Act, 1949. RBI also stated that the bank had sufficient liquidity to repay its deposit liabilities during winding up.
- Earlier scheduled-bank status: PPBL had originally been included in the Second Schedule of the RBI Act in 2021.
- Impact on Paytm services: The regulatory action concerns Paytm Payments Bank, not the Paytm app as a whole. Paytm has said services such as UPI, QR payments, Soundbox, card machines and payment gateway operations continue through partnerships with other banks.
Question:
Q1. Paytm Payments Bank was removed from which schedule of the Reserve Bank of India Act, 1934 in 2026?a) First Schedule
b) Second Schedule
c) Third Schedule
d) Fourth Schedule
Answer: (b) RBI excluded Paytm Payments Bank from the Second Schedule, thereby removing its status as a scheduled bank.
