Mumbai: One97 Communications, the parent company of Paytm, on Monday announced Vijay Shekhar Sharma has stepped down as the non-executive chairman and board member of Paytm Payments Bank (PPBL).
The shares of Paytm fell sharply after the Reserve Bank of India (RBI) ordered Paytm Payments Bank to cease operations by March 15 owing to ongoing substantial supervisory concerns and chronic non-compliances.
According to individuals who previously spoke to Reuters, the move against the payments bank unit was taken in response to “serious supervisory concerns,” which included inadequate customer identity and a lack of arms-length distance with Paytm.
Former Bank of Baroda (BOB.NS) chairman Srinivasan Sridhar opens a new tab. Former chairman of the state-owned Central Bank of India (CBI.NS) opens a new tab. 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.
According to Paytm Payments Bank CEO Surinder Chawla, the experience of the new board members would be “pivotal in guiding us towards enhancing our governance structures and operational standards.”
Paytm stated that it is in favour of its banking unit’s decision to remove its nomination 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.
Apart from the limitations imposed on the unit, two independent directors of Paytm Payments Bank have resigned since December. The bank will now begin the process of selecting a new chairman.
The RBI has not announced its decision to cancel the payment bank unit’s licence, even though it has delayed the first deadline for closing down operations.
(With Reuters Inputs)
Follow us on Twitter, Google News, and Instagram, and like us on Facebook for the latest updates and exciting stories.
