One 97 Communications announced on Friday that its board has sanctioned the discontinuation of inter-company agreements with Paytm Payments Bank, aiming to decrease dependencies. This decision comes amidst the Reserve Bank of India's (RBI) scrutiny of One 97 Communications' associate firm, Paytm Payments Bank Limited (PPBL), due to ongoing non-compliance issues and substantial supervisory concerns.
In a regulatory filing submitted on Friday, One 97 Communications, the parent company of Paytm, disclosed that it, along with its associate entity Paytm Payments Bank Limited (PPBL), has implemented additional measures to bolster the independent operations of PPBL.
As part of this process to reduce dependencies, Paytm and PPBL have mutually agreed to discontinue various inter-company agreements with Paytm and its group entities, the BSE filing said. Also, the shareholders of PPBL have agreed to simplify the Shareholders Agreement (SHA) to support PPBL’s governance, independent of its shareholders, it added.
On March 1, 2024, the Board of OCL (presumably One 97 Communications Limited) endorsed the termination of agreements and the amendment of the Shareholders' Agreement (SHA). Paytm had previously declared its intention to forge new partnerships with alternative banks and undertake actions to ensure uninterrupted services for its customers and merchants. In its communication to stock exchanges on February 1, 2024, the company had outlined the potential financial implications of these decisions.
As informed earlier, One 97 Communications Limited (OCL) and its services that include the Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines will continue to work uninterrupted. Paytm is committed to uphold the highest standards of market-leading innovation and technology-enabled solutions for its customers, the company added.