New Delhi: The Reserve Bank of India (RBI) has excluded Paytm Payments Bank Limited (PPBL) from the list of scheduled banks under the Second Schedule to the Reserve Bank of India Act, 1934. But for millions of Paytm users, the immediate question is: Does this affect UPI payments?

The short answer is no. The latest RBI notification does not, by itself, mean Paytm UPI transactions will stop.

The RBI has excluded PPBL from the Second Schedule to the Reserve Bank of India Act, 1934. The Second Schedule contains the list of banks recognised as scheduled banks.

According to an RBI press release, “Paytm Payments Bank Limited was excluded from the Second Schedule vide Notification DoR.LIC.No.S3674/16.13.215/2026-27 dated July 31, 2026.”

The notification was published in the Gazette of India (Part III-Section 4) dated September 7, 2026.

The latest move follows the RBI’s earlier action against PPBL and the subsequent winding-up proceedings.

The RBI had cancelled PPBL’s banking licence with effect from the close of business on April 24, 2026, citing serious regulatory violations and concerns over the manner in which the bank’s affairs were conducted.

The central bank had said the affairs of the bank were conducted in a manner detrimental to the interests of the bank and its depositors. It had also cited non-compliance with conditions stipulated in PPBL’s payments bank licence.

The RBI had directed PPBL not to undertake banking activities or any additional business with immediate effect.

The Delhi High Court subsequently ordered the winding up of PPBL. According to the RBI, the High Court, through orders dated July 8, 2026, and July 22, 2026, directed that the bank be wound up under the provisions of the Banking Regulation Act, 1949, read with the Companies Act, 2013.

The RBI said on July 28 that former State Bank of India Chief General Manager Girikumar M Nair had been appointed as the Official Liquidator.

What does ‘scheduled bank’ mean?

Being included in the Second Schedule means a bank is recognised as a scheduled bank under the RBI Act. The latest notification removes PPBL from that list.

However, this status should not be confused with the Paytm app itself or with UPI as a payment system.

UPI is operated by the National Payments Corporation of India (NPCI), and UPI transactions involve banks and payment service providers. NPCI’s UPI documentation states that all UPI users need a banking account with a UPI-enabled bank and that the user’s bank account is debited when a transaction is made.

This means that the important distinction for Paytm users is between PPBL as a bank and Paytm as a UPI app/payment platform.

Will Paytm UPI transactions stop?

Not because of this notification alone. If a Paytm user has a UPI-linked account with another UPI-enabled bank, the UPI transaction is processed through that bank and the UPI ecosystem. NPCI’s current UPI framework continues to list Paytm among apps enabled for certain UPI services.

Therefore, the RBI’s latest decision to remove PPBL from the scheduled-bank list should not be interpreted as an order stopping Paytm UPI transactions.

The key issue is which bank is actually linked to the user’s UPI account and which entity is providing the relevant payment service.

What about Paytm Payments Bank accounts?

This is different from using the Paytm app with a UPI account held by another bank.

The latest RBI notification concerns Paytm Payments Bank Limited, which is already under winding-up proceedings. The bank’s licence was cancelled earlier, and the Delhi High Court has ordered its winding up.

Therefore, users should not interpret the continued availability of Paytm’s UPI interface as meaning that PPBL has resumed normal banking operations.

What should Paytm users check?

Users who make UPI payments through Paytm should check the bank account linked to their UPI ID.

If the linked account is with another UPI-enabled bank, the latest RBI notification concerning PPBL’s scheduled-bank status does not automatically disrupt those UPI transactions.

UPI itself remains a live payment system with hundreds of participating banks. NPCI’s latest statistics show 752 banks were live on UPI in August 2026, when the platform processed more than 24.5 billion transactions.