India's Reserve Bank of India has cancelled the banking license of Paytm Payments Bank, dealing a significant blow to one of the country's largest digital payment platforms.

Paytm Payments Bank is a subsidiary of One97 Communications, the parent company of the popular Paytm digital wallet and payments service. The payments bank had been operating under regulatory oversight since its establishment.

The cancellation of the banking license represents a major setback for Paytm's financial services operations. Payments banks in India are allowed to accept deposits and provide remittance services but cannot issue loans or credit cards.

This development comes amid increased regulatory scrutiny of India's fintech sector. The Reserve Bank of India has been tightening oversight of digital payment platforms and financial technology companies in recent years.

The impact on Paytm's broader business operations and its millions of users remains to be determined as the company responds to the regulatory action.