Paytm said on Monday that Vijay Shekhar Sharma stepped down as non-executive chairman and board member from its payments bank, as the troubled digital payments startup restructured its board following a central bank crackdown.
According to the media report, the action against Paytm Payments Bank was prompted by “serious supervisory concerns,” such as inadequate customer identification and a lack of arms-length distance from Paytm.
Earlier, the Reserve Bank of India directed the banking subsidiary to cease operations by 15 March due to continuous noncompliance and ongoing serious regulatory concerns, causing a drop in Paytm’s stock.
Srinivasan Sridhar, former chairman of the state-owned Central Bank of India, former Bank of Baroda Executive Director Ashok Kumar Garg and two retired Indian Administrative Service officers will join the board, according to a Paytm exchange filing.
According to Paytm Payments Bank CEO Surinder Chawla, the new board members’ knowledge would be “pivotal in guiding us towards enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices.”
Paytm supports its banking unit’s decision to form a board of exclusively independent and executive directors by removing its candidate, according to the company, adding that Sharma will also stand down from the board to “enable the transition.”
Sharma owns a 51 per cent share of Paytm Payments Bank, while One 97 Communications, as Paytm’s parent company owns the balance.
The company also informed that they will commence the process of appointing a new Chairman.
