New Delhi: Amidst the crisis, Paytm Payments Bank's non-executive chairman and board member Vijay Shekhar Sharma has resigned. The decision follows measures taken by the Reserve Bank of India, including an order to cease operations of the payments bank by March 15.
Sharma said his resignation from the board and the appointment of independent directors were strategic steps to enable a smooth transition and improve the constitution.
Sharma owns 51 percent stake in Paytm Payments Bank. There are also indications of an attempt to separate Paytm from its payments bank unit and set it up as an independent entity.
Paytm is the UPI app with billions of users in India. Last day the Reserve Bank issued an order imposing more restrictions on this payments bank. Do not add new customers after February 29. The RBI directive also states that deposits should not be accepted or wallets should be topped up in the account of Paytm Bank.
Vijay Shekhar had come forward saying that none of the Paytm users need to worry about the RBI ban. He said then that even after February 29, the Paytm app will function as normal. Paytm's parent company, One97 Communications Limited (OCL), has partnerships with other banks as well. So even if its own Paytm Payments Bank is banned, the company can continue to offer most of its services through partnerships with other banks.
The regulatory challenges faced by Paytm have affected the stock value. After RBI's order, there was a significant drop. While the RBI did not specify the board restructuring, the move is believed to be aimed at reassuring the regulatory body about Paytm's commitment to complying with norms.