Vijay Shankar Sharma resigns: On Monday, Paytm Payments Bank announced that it was reorganizing its board of directors at Paytm Payments Bank, an affiliate of Paytm. And now the four executives have been hired to continue the business.
Four executives have been appointed as independent directors: former chairman of the Central Bank of India Srinivasan Sridhar; retired IAS officer Shri Debendranath Sarangi; former executive director of Bank of Baroda Shri Ashok Kumar Garg; and retired IAS Smt. Rajni Sekhri Sibal.
Vijay Sharma gave up his position as part-time non-executive chair and left the board, according to the bank subsidiary.
The nomination comes after harsh business limitations were imposed by the Indian central bank on Paytm Payments Bank, of which Vijay Shankar Sharma has a 51% interest. The majority of the limitations are scheduled to take effect on March 15. (Paytm held a 49 percent share in Paytm Payments Bank.)
Vijay on the reports
Early this month, TechCrunch revealed that the Indian central bank was considering ousting Paytm founder Vijay Shankar Sharma and instituting a board reorganization at Paytm Payments Bank.
This resignation of Vijay comes after the RBI in the late last month announced that “persistent” non compliances and “continuing material supervisory concerns” were discovered in the bank following a thorough audit conducted by external auditors.
According to the RBI, the noncompliance called for “further supervisory action.” A few days later, it restated that the “gravity of the situation” warranted its actions being “proportionate.”
Paytm announced in an exchange filing on Monday that two retired Indian Administrative Service officers and Executive Director Ashok Kumar Garg will be joining the board.
New Board to guide, says CEO
According to Paytm Payments Bank CEO Surinder Chawla, the experience of the new board members would be “pivotal in guiding us toward enhancing our governance structures and operational standards”.
Paytm stated that it is in favor of its banking unit’s decision to remove its candidate and choose a board consisting solely of independent and executive directors. It further stated that Sharma’s resignation from the board will “enable the transition”.
One 97 Communications, the official name of Paytm, controls the remaining 51% of the shares in Paytm Payments Bank, which is owned by Sharma.
Notice by the Watchdog
The banking watchdog sent notice last week that it was attempting to limit the harm at Paytm, where Paytm Payments Bank handled the majority of the transactions.
“A major unknown for Paytm (from the recent RBI action against PPBL) is resolved, we believe, with the RBI’s clarification that @paytm UPI handles can be seamlessly migrated to other banks (if NPCI grants TPAP approval to Paytm),” Goldman Sachs analysts wrote in a note.
Conclusion by RBI
Furthermore, the RBI has instructed NPCI to look into Paytm’s request to function as a TPAP (to offer UPI); if this request is approved, we anticipate that Paytm will be able to keep the majority of its MTU base and, as a result, be able to continue making money off of these users by cross-selling other products
Comments 2