Vijay Shekhar Sharma resigns as chairman of Paytm Payments Bank - Hindustan Times

Vijay Shekhar Sharma resigns as chairman of Paytm Payments Bank; board reconstituted

Feb 27, 2024 08:38 AM IST

Paytm founder Vijay Shekhar Sharma resigned as non-executive chairman and board member of its payments bank's unit in a major overhaul.

Paytm founder Vijay Shekhar Sharma has resigned as part-time non-executive Chairman of Paytm Payments Bank Limited (PPBL) ahead of the March 15 deadline to wind down its business.

Paytm founder and CEO Vijay Shekhar Sharma.(Reuters)
Paytm founder and CEO Vijay Shekhar Sharma.(Reuters)

PPBL has also reconstituted its Board of Directors with the appointment of Ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal, One 97 Communications Limited said in a regulatory filing on Monday.

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"The company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing a new Chairman," the filing said.

Read: Paytm FASTag will not work after March 15. What alternatives are the best for you?

Sharma owns a 51% stake in Paytm Payments Bank, while One 97 Communications, as Paytm is formally known, owns the rest.

The new board members' expertise will be "pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices", Paytm Payments Bank CEO Surinder Chawla said.

Read: Why is RBI so cranky about fintech firms after Paytm crisis?

The decision comes amid RBI's crackdown on the payments bank over persistent non-compliance and supervisory concerns.

The banking regulator had ordered the fintech firm to stop its banking activities after February 29 and later extended the deadline to March 15.

“The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” the RBI said in a statement on its website.

Read: NPCI to examine Paytm's third-party app request for UPI: RBI

The RBI said the bank will not be allowed to take any further deposits or conduct credit transactions or carry out top ups on any customer accounts, prepaid instruments, wallets, cards for paying road tolls. However, interest, cashbacks, or refunds can be credited anytime.

The troubled firm is likely to partner with Axis Bank, HDFC Bank, State Bank of India and Yes Bank for processing transactions via the popular unified payments interface (UPI), according to Reuters.

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