Paytm Founder and CEO, Vijay Shekhar Sharma, has stepped down from the board of Paytm Payments Bank, as disclosed in an exchange filing on Monday. One97 Communications Ltd. (OCL), the parent company, has withdrawn Sharma as a part-time non-executive chairman and board member from the bank.
The filing stated, "OCL withdraws its nominee from the Paytm Payments Bank Board, and Vijay Shekhar Sharma steps down as part-time non-executive chairman and board member; PPBL's future business is to be led by a reconstituted board." With this development, OCL has reconstituted a new board, welcoming four new members, all joining as independent directors. The new appointees are Srinivasan Sridhar, former Chairman of the Central Bank of India; Debendranath Sarangi, a retired IAS officer; Ashok Kumar Garg, former Executive Director of the Bank of Baroda; and Rajni Sekhri Sibal, retired IAS.
The filing also mentioned OCL's support for PPBL's move toward a board consisting of only independent and executive directors by removing its nominee. Vijay Shekhar Sharma's resignation from the Paytm Payments Bank Board aims to facilitate this transition. PPBL is set to initiate the process of appointing a new chairman in the near future.
Media reports indicates that the new board has been strategically assembled to focus primarily on compliance and steer the bank clear of issues with the Reserve Bank of India (RBI). The board is expected to adopt a zero-tolerance policy and is planning a complete decoupling from the parent company, Paytm, except for the capital component.
Furthermore, the new board is determined to restore Paytm Payments Bank to its former glory, emphasizing a return to stringent compliance measures. This development follows the ongoing regulatory clampdown on Paytm Payments Bank, initiated on January 31. While facing regulatory challenges, the RBI recently extended the deadline for Paytm Payments Bank restrictions to March 15, keeping the customers' best interests in mind.