Updated February 26th, 2024 at 21:43 IST

Vijay Shekhar Sharma stepped down from Paytm Payment bank, what does this mean?

The company also informed that they will commence the process of appointing a new chairman. 

Reported by: Business Desk
Paytm | Image:Paytm/Facebook
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VSS stepped down: Vijay Shekhar Sharma has stepped down from the board of Paytm Payments Bank on Monday. The company also informed that they will commence the process of appointing a new chairman. Paytm Payments Bank Limited (PPBL), has reconstituted its Board of Directors with the appointment of Ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and Retd. IAS Rajni Sekhri Sibal. They have recently joined as Independent Directors. 

What does this mean: 

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Paytm Payment Bank has been having a tough time ever since the RBI asked Paytm Payment Bank to stop its bulk of activities after Feb 29, later on, the date was extended till March 15. The move of constituting a new board of directors by Paytm Payment Bank can be seen as a step by Vijay Shekhar Sharma to step back a bit from the issue and reaffirm the faith in the complete independence of Paytm Payment Bank. As the violations 

One of the issues with the Paytm Payment Bank as aired by experts was related-party transactions involving Paytm Payments Bank and other entities within the Paytm group. The Reserve Bank of India (RBI) raised alarms about the payments bank's insufficient implementation of measures to isolate itself from potential conflicts of interest, from other entities of the company including the parent company Paytm. 

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The RBI highlighted worries about the notable interdependence between Paytm Payments Bank and other group companies, indicating potential indirect control by founder Vijay Shekhar Sharma over the bank's decision-making and operations.

The move of constituting of new board is to reaffirm the faith that Vijay Shekhar does not influence bank decision-making and that an independent board and people will be driving the embattled Paytm Payment Bank. 

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One97 Communications Ltd, the parent company, holds complete ownership of Paytm Payment Services and a 49 per cent stake in Paytm Payments Bank, with founder Vijay Shekhar Sharma personally owning the remaining 51 per cent.

 

 

 

 

 

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Published February 26th, 2024 at 21:42 IST