Paytm CEO Vijay Shekhar Sharma steps down from payments bank board amid crisis

Paytm founder and CEO Vijay Shekhar Sharma has steppeddown as the chairman of Paytm Payments Bank, according to an exchange filing, on Monday (Feb 26). This comes as the embattled company overhauled its board in the wake of a clampdown by India’s central bank – the Reserve Bank of India (RBI).

Paytm’s parent company, One97 Communications said that it has withdrawn its nominee Sharma from the bank’s board as a part-time non-executive chairman and board member.

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“The Company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition,” said the company in an exchange filing.

It added, “PPBL (Paytm Payments Bank Limited) has informed us that they will commence the process of appointing a new Chairman.”

Sharma has a 51 per cent stake in Paytm Payments Bank, while One 97 Communications owns the rest.

New directors to join board

Srinivasan Sridhar, former chairman of state-owned Central Bank of India, former Bank of Baroda and Executive Director Ashok Kumar Garg and two retired Indian Administrative Service officers, Debendranath Sarangi and Rajni Sekhri Sibal, will join the board as Independent Directors, said Paytm.

The board also comprises former Executive Director of Punjab & Sind Bank, Arvind Kumar Jain as Independent Director and Surinder Chawla, MD and CEO at Paytm Payments Bank, the company said.

Chawla welcomed the recent appointments to the board and said that it marks a “significant step forward in PPBL’s journey. Their distinguished expertise will be pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices.”

RBI’s order to Paytm

The Reserve Bank of India (RBI) had asked Paytm Payments Bank to wind down operations by March 15 citing persistent non-compliances and continued material supervisory concerns, last month.

Paytm Payments Bank (the banking arm of Paytm) was ordered to stop accepting fresh deposits in its accounts or popular wallets starting in March.

The RBI’s decision proved to be a major blow to Paytm – one of India’s largest payment firms and triggered a meltdown in the company’s stock.

Notably, Sharma’s stepping down comes months after two independent directors also quit for reasons other than the restrictions placed on the unit by the RBI.

(With inputs from agencies)