Vijay Shekhar Sharma, the founder of Indian fintech major Paytm, has stepped down from his position as the non-executive chairman and board member of Paytm Payments Bank Limited. This decision comes as a part of a broader leadership transformation and amidst the Reserve Bank of India’s intensified scrutiny over the bank’s operations.
Vijay Shekhar Sharma, a majority shareholder in PPBL has taken a step back to facilitate the board’s reconstitution with independent directors, Paytm parent One 97 Communications said in a stock market filing. The new board includes former chairman of the Central Bank of India Srinivasan Sridhar, retired IAS officers Debendranath Sarangi and Rajni Sekhri Sibal, and former Executive Director of Bank of Baroda, Ashok Kumar Garg.
“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 Surinder Chawla, Managing Director and Chief Executive Officer of Paytm Payments Bank. In addition to the leadership changes, PPBL is in the process of appointing a new chairman.
While Vijay Shekhar Sharma remains the majority shareholder of PPBL with a 51% stake, his departure from the board signifies a step towards addressing the RBI’s concerns and regaining trust in the company’s operations. To recap, the RBI imposed restrictions on PPBL in January, citing “persistent non-compliances and continued material supervisory concerns”. Reportedly, these include inadequate customer identification and a lack of independence from Paytm. These restrictions included a ban on accepting new deposits and conducting credit transactions, starting from February 29th, which was later extended to March 15th.
Meanwhile, the move also comes amid a crucial time for Paytm, as it seeks approval from the National Payments Corporation of India (NPCI) to continue operating its UPI app as a Third-Party Application Provider (TPAP). The company is also exploring partnerships with major banks like Axis Bank, HDFC Bank, State Bank of India, and Yes Bank to process transactions through UPI, Reuters reported.
