Paytm crisis: Vijay Shekhar Sharma steps down as PPBL chairman, board reconstituted

Vijay Shekhar Sharma has stepped down as part-time non-executive chairman of Paytm Payments Bank Ltd (PPBL), and the board of the bank has been reconstituted, a filing said on Monday, adding that PPBL will commence the process of appointing a new chairman.

The dramatic turn of events assumes significance in the backdrop of the Reserve Bank of India's crackdown on Paytm Payments Bank over persistent non-compliance and continued material supervisory concerns.

In a regulatory action last month, RBI barred PPBL from accepting fresh deposits or top-ups in customer accounts, wallets, FASTags and other instruments after 29 February, a deadline later extended to 15 March.

In a release on Monday, One 97 Communications Ltd (OCL) said its associate entity 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 Bank of Baroda executive director Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal. They have recently joined as independent directors, it elaborated.

OCL is the owner of the Paytm brand and holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Sharma has a 51 per cent stake in the bank.

OCL said it supports PPBL’s move of opting for a board with only independent and executive directors by removing its nominee. "The company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing a new Chairman," the filing said.

The board also includes former Punjab & Sind Bank executive director Arvind Kumar Jain as independent director and Surinder Chawla, MD and CEO at Paytm Payments Bank, who welcomed the appointments saying it marked 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," Chawla said.

On Friday, RBI had advised the National Payments Corporation of India (NPCI) to examine the possibility of migrating Paytm Payments Bank customers using the UPI handle '@paytm' to a few other banks, in a bid to prevent any disruptions in the payment ecosystem. As per the PPBL website, it has 30 crore wallets and 3 crore customers.