RBI's Clampdown: The Paytm Payments Bank Saga Unraveled

The Reserve Bank of India (RBI) has directed Paytm Payments Bank to cease accepting fresh deposits in its accounts or wallets from March, potentially leading to the cancellation of its license. The bank, which is 49% owned by Paytm, has faced regulatory concerns prompting the RBI's action. Paytm has announced plans to comply with the RBI's directions and expects an impact of 3-5 billion rupees on its annual earnings. The move has raised reputation and regulatory concerns for Paytm, while the bank's ability to meet outflows is expected to be supported by its holdings in government bonds and deposits at other banks.