Vijay Shekhar Sharma steps down as Paytm Payments Bank chairman
What's the story
Paytm founder Vijay Shekhar Sharma on Monday resigned as a part-time non-executive chairman of Paytm Payments Bank Limited (PPBL). He stepped down from the board of the embattled payments bank in order to enable its reconstitution, reports said. One 97 Communications Limited (OCL), which owns Paytm, informed the stock exchanges of the development on Monday.
Twitter Post
Sharma resigns from Paytm Payments Bank board
Vijay Shekhar Sharma steps down as part-time non-executive Chairman and Board member of Paytm Payments Bank Ltd (PPBL), Board reconstituted
— ANI (@ANI) February 26, 2024
(file photo) pic.twitter.com/uOTM509BRy
Details
Development precedes RBI's March 15 deadline to halt operations
In a statement, One 97 Communications said Paytm Payments Bank will soon "commence the process of appointing a new chairman" following Sharma's resignation. The development comes ahead of the Reserve Bank of India (RBI)'s March 15 deadline for PPBL to cease operations. It follows the central bank's crackdown on the payments bank due to ongoing non-compliance and supervisory concerns.
OCL's statement
PPBL MD-CEO welcomes new board members
Meanwhile, OCL also announced that ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Bank of Baroda Executive Director Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal have joined the PPBL board. PPBL Managing Director and CEO Surinder Chawla said, "Their distinguished expertise will be pivotal in guiding us toward enhancing our governance structures and operational standards."
What RBI said
'Persistent non-compliances, continued material supervisory concerns': RBI
Last month, the RBI initially ordered Paytm Payments Bank to halt its activities after February 29 but 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," a statement by the RBI said.
What's next
What happens after March 15?
PPBL is now prohibited from accepting deposits, conducting credit transactions, or performing top-ups on customer accounts, wallets, FASTags, or cards. After March 15, customers can still use, withdraw, or transfer money from their PPBL wallets. But they won't be able to add/transfer money to the wallets or receive any credits other than cashback/refunds. Wallets can be closed and balances transferred to another bank account.