Vijay Shekhar Sharma has resigned from his role as the part-time non-executive chairman and board member of Paytm Payments Bank Limited (PPBL), as indicated by a filing on the BSE by One97 Communications Ltd (OCL).
In addition, the company has restructured its board of directors, appointing former Central Bank of India chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former executive director of Bank of Baroda Ashok Kumar Garg, and retired IAS Rajni Sekhri Sibal as independent directors. The company stated that these individuals recently joined the board.
OCL expressed support for PPBL’s decision to transition to a board comprising only independent and executive directors by removing its nominee. PPBL has informed OCL that they will initiate the process of appointing a new chairman, according to the disclosed information [pdf].
This move follows the recent imposition of business restrictions on Paytm Payments Bank by the Reserve Bank of India (RBI) due to non-compliance and regulatory concerns. These restrictions are expected to impact various business verticals related to the payments bank within Paytm.
In response to these developments, the RBI has taken additional measures to protect the interests of affected customers, including granting temporary relaxations on the imposed restrictions. The stipulated timeline for further deposits, credit transactions, or top-ups in customer accounts, as well as for banking services such as fund transfers, BBPOU, and UPI facilities, has been extended from February 29, 2024, to March 15, 2024.
RBI Deputy Governor Swaminathan J clarified that the regulatory actions on Paytm’s payments bank were not sudden but followed extensive discussions and provided the company with ample time to address the issues. According to Das, when constructive engagement fails or the regulated entity does not take effective action, the RBI resorts to imposing business restrictions.