Headed by ex-SEBI chairman M Damodaran, the committee will work closely with Paytm’s board to further strengthen compliance guardrails at the company
The panel also comprises names such as ex-ICAI president MM Chitale and former chairman and MD of Andhra Bank R Ramachandran
The development comes amid the RBI’s regulatory crackdown on the fintech major’s payments bank over material supervisory concerns
In the middle of a regulatory quagmire, fintech major Paytm on Friday (February 9) announced the formation of a group advisory committee to address compliance and regulatory issues.
The panel will be headed by former SEBI chairman M Damodaran. Ex-president of the Institute of Chartered Accountants of India (ICAI) MM Chitale and erstwhile chairman and managing director of Andhra Bank R Ramachandran will be other members of the group advisory committee.
In a regulatory filing, One 97 Communications, the parent of the fintech major, said the committee will work closely with its board to further strengthen compliance guardrails. It also said that the panel will induct additional members, as necessary.
“The Board of One 97 Communications announces formation of a group advisory committee chaired by former SEBI Chairman Mr. M. Damodaran, to work with the Board in further strengthening compliance, and regulatory matters… Committee will work closely with the Board,” said the fintech giant.
Paytm also said that it was committed to driving sustainable business growth and adhering to regulatory norms.
The announcement of a new panel comes hours after reports surfaced that Paytm Payments Bank failed to heed the Reserve Bank of India’s (RBI) warnings about improving the gaps in its internal risk management concerning flagging transactions involving politically exposed persons (PEPs).
Close after that, the payments bank refuted the claims and said that any concerns regarding the monitoring of PEPs were “highly speculative”.
Earlier in the day, Inc42 reported on Paytm’s acquisition of ONDC seller Bitsila via Paytm Ecommerce and renamed the acquired entity to PAI Platform to bolster ONDC play. However, the fintech major denied the development.
In the middle of all this, the central bank is slated to meet the National Highways Authority of India (NHAI) and the National Payments Corporation of India (NPCI) later next week to finalise the modalities for migrating merchants and consumers from the troubled payments bank.
This comes a week after the apex bank, in an order dated January 31, barred Paytm Payments Bank from taking deposits, credit, or processing top-up transactions. Citing ‘persistent non-compliances’, the central bank also barred the fintech major from processing other banking services such as UPI facilities and fund transfers post February 29.
As investors began to dump the stock in droves after the RBI’s directive, Paytm founder and chief executive officer (CEO) Vijay Shekhar Sharma knocked on the doors of senior central bank officials as well as finance minister Nirmala Sitharaman.
The meetings largely centred around seeking an extension on the February 29 deadline and more clarity on the transfer of the licence of its wallets business.
Meanwhile, the fintech major’s stock continues to see a heavy selloff on the bourses. Shares of Paytm closed 6.09% lower at INR 419.85 on the BSE on Friday (February 9).