Following the ongoing matter concerning the Reserve Bank of India (RBI) and Paytm Payments Bank Limited (PPBL), Paytm’s co-founder Vijay Shekhar Sharma has resigned from the position of non-executive chairman and board member at the PPBL. The company confirmed the same in its filing with the RBI on Monday.
Paytm has confirmed the removal of Vijay Shekhar Sharma and will facilitate the process of appointing a new Chairman. With that being said, Ashok Kumar Garg (former Executive Director of Bank of Baroda), Shrinivasan Sridhar (former Chairman of Central Bank of India), and two retired Indian Administrative Service officers have been roped in to join the board members of Paytm.
Restructuring the board of members and appointing a new Chairman will ensure the company facilitates its operational standards and governance structures and moves ahead in this phase of transition and beyond.
RBI has mandated PPBL to cease taking any deposits and credits from March 15th onwards. The deadline was revised from the old February 29th following the various points including the bulk of merchants and customers that use PPBL daily.
The exchange filing also mentions that the banking unit of the company will appoint independent and executive directors only.
Post-March 15th, you won’t be able to access any credit/deposit services at PPBL. FASTags, National Common Mobility Cards (NCMC), cashbacks, and rewards will continue to be entertained unless the balance is nil.
Paytm has also filed a request with RBI and NPCI to become a third-party application processor (TPAP) allowing it to furnish UPI payments by partnering with four to five banks as service providers. This will ensure @paytm handles remain operable even after the midnight strikes on March 15th requiring no further changes to the customers.
Paytm is likely to partner with banks such as Axis Bank, SBI, Yes Bank, and HDFC Bank, among others that have the technological bandwidth to handle large volumes of UPI transactions without any hindrance. However, reports suggest it would take another month before NPCI assesses partner bank’s infrastructure to handle such volumes although it remains to be seen for sure.
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