Paytm founder Vijay Shekhar Sharma has stepped down as part-time non-executive Chairman of Paytm Payments Bank Limited (PPBL) ahead of the looming March 15 deadline to wind down operations. The move comes amidst intensified regulatory scrutiny from the Reserve Bank of India (RBI).
PPBL has undergone a significant restructuring of its Board of Directors, appointing key individuals to navigate the challenges ahead. Ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal are the new board members, as announced in a regulatory filing by One 97 Communications Limited, the formal entity behind Paytm.
Vijay Shekhar Sharma’s departure extends to his resignation from the Board of Paytm Payments Bank, facilitating a seamless transition. The filing noted that PPBL will initiate the process of selecting a new Chairman.
With a 51% stake, Sharma remains a significant shareholder in Paytm Payments Bank, while One 97 Communications owns the remaining stake.
Paytm Payments Bank CEO Surinder Chawla emphasized the importance of the new board members, stating, “The expertise of the new board members will be pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices.”
This development unfolds against the backdrop of the RBI’s stern measures, including a directive for Paytm Payments Bank to halt banking activities after February 29, later extended to March 15. The regulatory actions stem from persistent non-compliance and supervisory concerns.
“The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” stated the RBI on its website.
Effective immediately, Paytm Payments Bank is prohibited from accepting new deposits, conducting credit transactions, or facilitating top-ups on customer accounts, prepaid instruments, wallets, or cards for road toll payments. However, interest, cashbacks, or refunds can still be credited.
Amidst these challenges, Paytm is reportedly exploring partnerships with Axis Bank, HDFC Bank, State Bank of India, and Yes Bank for processing transactions via the popular Unified Payments Interface (UPI), according to Reuters.
