Delhi High Court Orders Winding Up of Paytm Payments Bank On RBI Plea

The Delhi High Court has recently ordered the winding up of Paytm Payments Bank Ltd on a petition filed by the Reserve Bank of India (RBI) under Sections 38 and 39 of the Banking Regulation Act, 1949. The bank had decided not to oppose the regulator's action.

Justice Anish Dayal accepted the RBI's plea for winding up the company and appointed Girikumar M. Nair as the Official Liquidator.

"The prayer of the RBI seeking winding up of the company under Section 38 read with Section 39 of the Banking Regulation Act, 1949 is, therefore, accepted. The suggested liquidator by the RBI, Shri. Girikumar M. Nair, is appointed as the OL, there being no objection on behalf of the respondent/company. He shall exercise all the powers prescribed under theprovisions of the Banking Regulation Act, 1949, along with applicable provisions of the Companies Act, 2013.", the Court ruled.

The matter arose after the Reserve Bank of India cancelled Paytm Payments Bank's banking licence on April 24, 2026 citing persistent regulatory and governance failures, including conduct detrimental to the interests of the bank and its depositors, prejudicial management and non compliance with the conditions of its payments bank licence.

On April 25, 2026, the Board of Directors of Paytm Payments Bank approved voluntary winding up in principle while its shareholders passed a special resolution consenting to the winding up as instructed by or with the permission of, the RBI. On 14 June 2026, the bank's Board resolved not to make any proposal or representation before the RBI and the decision was communicated to RBI on 16 June 2026.

Accordingly, the court directed that the Official Liquidator to immediately assume all powers of the Board under the Banking Regulation Act, 1949 and the Companies Act, 2013.

It also approved the RBI's proposal to pay the Official Liquidator a remuneration of ₹5.5 lakh from the realised funds of the company and directed him to submit a preliminary report within two months.

The matter has been listed on 17 September 2026.

For Petitioner: Raghav Shankar, ASG with Vivek Shetty, Suharsh Sinha, Nishant Uupadhyay, Dhaval Vora, Pallavi Mishra, Navneet R. & Alankrita Sinha, Advocates

For Respondent: Dayan Krishnan, Sr. Adv. with Karun Mehta, Carina Arora, Ambuj Sachan, Ashim Sood, Senu Nizar, Kartikeya Jaiswal and Shreedhar Kale, Advocates