SUMMARY
Paytm said Vijay Shekhar Sharma has resigned as the part-time non-executive chairman and board member of the payments bank
The payments bank has reconstituted its board and made four new appointments
The development comes following the imposition of curbs on the payments bank by the RBI for persistent non-compliance
Amid regulatory issues, paytm
founder and chief executive officer (CEO) Vijay Shekhar Sharma has stepped down from the board of Paytm Payments Bank.
In a filing with the bourses, the fintech startup said that Sharma has resigned as the part-time non-executive chairman and board member of the payments bank. It also said that a newly-reconstituted board will now helm the affairs at the company.
The company also said that the payments bank will soon commence the process of appointing a new chairman.
The new appointments include former Central Bank of India chairman Srinivasan Sridhar, retired IAS officers Debendranath Sarangi and Rajni Sekhri Sibal, and Bank of Baroda’s ex-executive director Ashok Kumar Garg.
The new appointees recently joined the bank’s board as independent directors, it said. Apart from them, the board also comprises names such as former banker Arvind Kumar Jain and Paytm Payments Bank’s managing director and CEO Surinder Chawla.
“… Their distinguished expertise will be pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices,” said MD Chawla.
Commenting on his appointment, Srinivasan Sridhar said, “I am dedicated to utilising my extensive banking expertise to steer the bank towards expanding its range of compliant services. It is my goal to ensure that PPBL becomes a paragon of regulatory compliance, setting new standards in delivering exceptional value to the stakeholders, in strict adherence with regulatory frameworks and best practices.”
While Sridhar has more than four decades of banking experience under his belt, Sarangi is a 1977 batch IAS officer of Tamil Nadu cadre who also serves on the board of multiple companies.
In addition, Sibal is a retired IAS officer of the Haryana cadre and served as the secretary in the union government during her tenure. Garg also boasts of nearly four decades of banking experience at Bank of Baroda.
Sharma’s resignation and the reconstitution of the board comes at a very tumultuous time for Paytm Payments Bank. Last month, the Reserve Bank of India (RBI) announced a slew of curbs on the payments bank and barred it from taking any deposits or credit transactions, or top-ups in any of its customer accounts for “persistent non-compliances and continued material supervisory concerns”.
At first, the central bank also banned it from offering other banking services, such as UPI facility and fund transfers post February 29. Eventually, it extended the deadline for some of the restrictions to March 15.
Not just this, the payments bank is also under the radar of the Enforcement Directorate (ED) for alleged Foreign Exchange Management Act (FEMA) violations.
It is pertinent to note that Paytm Payments Bank is an associate of One97 Communications Ltd, the parent of Paytm. While Sharma holds 51% stake in the payments bank, the fintech giant has the remaining 49% stake.
Following the RBI’s action on the payments bank, shares of Paytm crashed sharply. However, the stock has made some recovery following further clarifications from the central bank on the issue.
After emerging as the biggest gainer among the new-age Indian tech stocks last week, shares of Paytm hit the upper circuit and closed the day nearly 5% higher at INR 427.95 on the BSE on Monday (February 26).
