The Reserve Bank of India (RBI) has cancelled the licence of Paytm Payments Bank, a move that significantly impacts the wallet operations of One97 Communications, the parent company of Paytm. Founder and CEO Vijay Shekhar Sharma's ambition to establish a full-stack banking franchise has been thwarted, as the cancellation effectively ends the original wallet-led model that underpinned the company's digital payment services. Despite this setback, brokerage firm Emkay noted that there is no immediate financial impact on Paytm, as its current operations function independently of the bank. However, the RBI's communication regarding the management's conduct was described as severe, raising perception risks for Paytm. The company is now considering reapplying for a prepaid payment instrument (PPI) licence to revive its wallet service, although the competitive landscape has narrowed due to the rise of alternatives like Unified Payments Interface (UPI) Lite. As of March 2026, Paytm Payments Bank reported 100.73 million outstanding PPI wallets, but only 6.8 million were active, indicating a significant decline in usage. Management has acknowledged that the wallet business is no longer a major player in the industry, prompting discussions about adapting their offerings to meet consumer needs in a changing market.