SoftBank Executive Munish Varma To Step Down From Paytm Board

SUMMARY

SoftBank’s action is consistent with its global strategy as it stands down from board positions after companies in its portfolio get public

Until now, Softbank has infused more than $10 Bn in Indian new age companies

The move comes after Paytm and PolicyBazaar’s stocks have been badly hit in the last few months

Munish Varma, the managing partner of SoftBank, is stepping down from the boards of Paytm and PolicyBazaar.

Japanese investor SoftBank’s action is consistent with its global strategy as it stands down from board positions after companies in its portfolio get public. However, SoftBank will continue to act as an investor and hold stake in both the companies, a Money Control report said.

Founded in 2008 by Yashish Dahiya, Alok Bansal and Avaneesh Nirja, PolicyBazaar is an insurance aggregator. Its online platform, Policybazaar.com offers a wide range of insurance policies to customers.

Founded in 2010 by Vijay Shekhar Sharma, Paytm is a digital payment application that enables customers to make hassle-free online transactions. It houses sub-brands such as Paytm and Paytm Payments Bank.

Until now, SoftBank has infused more than $10 Bn in Indian new age companies. Paytm and PolicyBazaar, being the largest companies in SoftBank’s portfolio, went public in 2021.

The move comes after both the stocks have been badly hit in the last few months.

In a series of events, recently, Paytm Payments Bank, a joint venture of Paytm and Vijay Shekhar Sharma, has also been barred from adding new customers to its servers. Reportedly, the move is taken to punish the fintech giant’s arm–Paytm Payments Bank for violating ‘Storage of Payment System Data’ law.

During the annual inspections led by RBI, it was surfaced that Paytm Payments Bank’s servers were sharing information with the China-based entities that indirectly hold a share in the company.

However, the fintech giant reverted to this with a Twitter post, saying, “A recent Bloomberg report claiming data leak to Chinese firms is false and sensationalist. Paytm Payments Bank is proud to be a completely homegrown bank, fully compliant with RBI’s directions on data localisation. All of the Bank’s data resides within India.”

Following this series of events including the recent RBI ban, shares of Paytm’s parent One97 Communications continues to plummet down, falling to a record low of INR 614.80 around 1.30 PM on Tuesday.