Paytm Payments Bank Limited has been excluded from the Second Schedule to the Reserve Bank of India Act, 1934, effective July 31, 2026. The exclusion, published in the Gazette of India on September 7, 2026, impacts its access to central bank facilities.
Paytm Payments Bank Removed from RBI’s Second Schedule
Paytm Payments Bank Limited (PPBL) has been formally excluded from the Second Schedule to the Reserve Bank of India Act, 1934, effective July 31, 2026. The decision was notified via DoR.LIC.No.S3674/16.13.215/2026-27 and published in the Gazette of India (Part III - Section 4) on September 7, 2026.
Inclusion in the Second Schedule qualifies a bank to be treated as a 'Scheduled Bank', conferring access to liquidity facilities such as the Liquidity Adjustment Facility (LAF), marginal standing facility (MSF), and re-discounting of securities. Exclusion implies PPBL no longer enjoys such privileges under the Act, significantly constraining its operational and monetary policy access.
Implication: This regulatory action signals increased supervisory scrutiny over payment banks. Practitioners in banking law must note that such exclusions, while rare, allow the RBI to enforce compliance under Section 42(6) of the RBI Act, 1934. Affected institutions may challenge such decisions under administrative law principles, including principles of natural justice.
Citations
- Reserve Bank of India Act, 1934, s 42(6)