In more exits for Paytm, business heads for UPI, merchant payments, and consumer payments — Ajay Vikram Singh, Bipin Kaul and Sandeepan Kashyap — have quit their positions
Sources told Inc42 about differences of opinion inside the management group, with some claiming that CEO Vijay Shekhar Sharma and departing COO Bhavesh Gupta had divergent views on some business practices
Based on the company’s statements on the reorganisation, CEO Sharma is looking to take charge of the key verticals and will work directly with their new leadership
Vijay Shekhar Sharma is once again taking charge of paytm
in a big way amid a major restructuring move at the fintech giant. The founder and CEO is expected to work directly with new leadership being put in place for key verticals as existing business heads and vertical heads are stepping away.
The changes come as Paytm faces an unprecedented attrition of top leadership. Adding to the recent spate of exits, Inc42 has learnt that chief business officers for three different verticals were asked to exit the company and resign from their positions over the past week.
Sources claim that Ajay Vikram Singh (CBO of user growth and UPI), Bipin Kaul (CBO of the offline payments business) and Sandeepan Kashyap (chief business officer of the consumer payments vertical) have all quit their positions.
These departures follow the resignation of president and COO Bhavesh Gupta, who will be stepping down from the company in the next couple of weeks. In addition, the company named new CEOs for its Paytm Money business, and saw the exit of other business heads.
For instance, One 97 Communications’ chief marketing officer Sumit Mathur as well as senior vice president of business Praveen Sharma also quit the company this year. Further, Paytm Payments Bank MD and CEO Surinder Chawla.
And given the upheaval at the very top, CEO Sharma seems to be taking the reins. “We are committed to ensuring a sustained growth across key business verticals as we are going through a restructuring initiative that signals a reinvigorated approach under Paytm’s CEO. These changes are part of our approach to strengthen Paytm’s next line of leaders,” a spokesperson for Paytm said.
By all indications, Sharma is looking to clean up Paytm’s compliance track record by directly working with the business heads of these key verticals.
On the recent exits, another source added that Gupta’s resignation has nothing to do with the above-mentioned CBOs’ exit. “After the whole RBI directive, every vertical undertook a review process and business heads were asked to resign when there were persistent issues in their verticals.”
The fintech giant is expected to disclose its Q4 FY24 and FY24 annual financial performance at the end of May 2024 and it’s likely that Paytm will only inform the shareholders about these changes alongside these disclosures.
Leadership Vacuum
The company did not reveal who these leaders were or whether it would be elevating existing employees to the CBO role for UPI, merchant payments and consumer payments.
“These robust leaders will work directly with the CEO and other senior management leaders fostering innovation and strengthening the group structure for sustainability and regulatory compliance. As and when we have further updates, we will continue to engage with concerned stakeholders,” the company spokesperson added.
But what exactly led to the current restructuring? The clearest answer is that Paytm has had to make structure changes due to the Reserve Bank Of India’s actions on Paytm Payments Bank and the subsequent impact on the company’s various verticals.
In particular, COO and president Gupta’s exit is said to be a big turning point in the company’s leadership structure. Gupta, who joined Paytm in 2020 from Clix Capital, tendered his resignation citing personal reasons. He will transition to an advisory role within the company from May 31, 2024 till the end of the year.
“Bhavesh Gupta was one of the influential people in power at Paytm. His resignation is bound to result in other key level exits at the firm. Expect more names to come out,” one source told Inc42 on the condition of anonymity.
Another source alleged that there were differences of opinion inside the management group, with some claiming that CEO Sharma and COO Gupta in particular had divergent views on some business practices. Paytm declined to comment on these allegations.
The Big Shift Inside Paytm
While Paytm had been thrown a potential curveball in December 2023 for its lending business, things really started to go wrong from January onwards.
First, the RBI barred Paytm Payments Bank from onboarding new users and from offering various services including UPI payments and deposits. RBI cited that the Paytm Payments Bank failed to comply with RBI’s regulations. These curbs not only impacted the banking business, but also affected the startup’s lending business from where it generates almost a quarter of its revenue.
RBI’s orders had opened a can of worms for the organisation which now had to assuage customers, stakeholders concerns and prevent dwindling of its share price. Unconfirmed reports further suggested that Paytm’s Payments Bank was not in complete compliance with the Know Your Customer (KYC) norms needed to onboard new users.
The bank was also alleged to have exposed itself to potential money laundering by not verifying the identity of many of the account holders. There were also concerns of multiple accounts being signed up using a single mobile number, which raised red flags on Paytm’s merchant payments and device subscription business.
It’s interesting to note that the three departing CBOs handle key verticals like merchant payments, UPI and consumer payments, which are said to be at the centre of the weak KYC procedures that have dealt a big blow to Paytm’s business. Most importantly, the company’s mobile wallet business operation has also come to a grinding halt as per RBI data.
Paytm shares continued to tumble for the second straight session this week and slumped 5% to touch the lower price band during the early trading hours on the BSE on Tuesday (May 7).
After some recovery in its share prices over the last few weeks, the shares touched INR 334.15 on the BSE, heading towards almost a three-month low level.
