Bernstein Stands Firm: Paytm's Core Business Is Untouched by the PPBL Shutdown

Key Takeaways

• Global brokerage Bernstein has maintained its “Outperform” rating on Paytm with a ₹1,500 price target, stating the RBI's cancellation of Paytm Payments Bank's licence.

• The RBI cancelled the banking licence of Paytm Payments Bank Limited on April 24, 2026, citing serious governance failures, regulatory non-compliance, and management practices detrimental to depositor interests. 

The Conclusion of PPBL, but Not the Conclusion of Paytm

The RBI's formal cancellation of Paytm Payments Bank's licence was widely anticipated. 

The central bank had already effectively shut down the payments bank in February 2024, banning it from accepting new deposits, wallet top-ups, and FASTag transactions.

Bernstein noted that the licence cancellation is an incremental development, given that Paytm had already created a clear operational separation from the payments bank, particularly after the early 2024 regulatory action.

The short-term impact was felt sharply on equity markets.

Shares of One97 Communications fell as much as 8% in early trade on April 27, even as brokerages including Bernstein, Goldman Sachs, and Emkay Global all maintained their buy ratings on the stock.

The long-term read, however, is more nuanced. Bernstein sees the PPBL closure potentially clearing a path for Paytm to pursue NBFC or PPI licences, unlocking new avenues in wallets and credit solutions.

A Timeline of PPBL's Regulatory Downgrade

The story of Paytm Payments Bank's fall is one of repeated warnings left unheeded. The table below traces the key regulatory milestones.
 

Customer deposits totalling ₹1,395.22 crore were held by PPBL as of March 31, 2025, across wallets, current and savings accounts, and gift instruments. 

The RBI has confirmed the bank holds sufficient liquidity to repay all depositors during the winding-up process.

Implications for Paytm's 100 Million Users

One97 Communications confirmed that Paytm's UPI, wallet, and payment services will continue to operate without interruption. 

The company stated that no services are provided in partnership with PPBL and that PPBL operates under the parent company's board and management.

The Paytm app, UPI payments, Paytm Gold, QR, Soundbox, and the payment gateway remain fully functional. 

Closing a Paytm wallet account and closing a Paytm UPI account are entirely separate actions; millions of daily users are unaffected.

Analysts Highlight a More Streamlined and Focused Paytm Going Forward

Bernstein noted that Paytm had previously written off its investment in the payments bank, ensuring no one-off financial hit from the cancellation.

With improving earnings visibility and a stable operating foundation, the brokerage's 'Outperform' rating signals strong conviction in Paytm's long-term trajectory.

One97 Communications stated that upon the winding-up order becoming effective, PPBL will cease to be an associate company of the parent under the Companies Act, 2013.

Analysts believe this clean severance removes the regulatory overhang that has weighed on the stock since 2022, giving the company room to rebuild investor confidence.

Conclusion

The PPBL closure marks the end of a troubled chapter, not the company itself. If Paytm successfully pursues new regulatory licences and rebuilds trust, this painful separation could ultimately prove to be one of its most strategically significant turning points.

FAQs

Does the RBI cancel the Paytm Payment Bank licence? 

Yes, the Reserve Bank of India (RBI) has cancelled the banking licence of Paytm Payments Bank Limited (PPBL). 

Is it true that Paytm is planning to cease operations by the last week of February?  

No, the main Paytm app is not shutting down. However, Paytm Payments Bank Limited (PPBL) has had its banking license cancelled by the RBI, with operations ceasing as of April 24, 2026.