Seems
Paytm
founder
Vijay Shekhar Sharma
did see trouble coming for Paytm Payments Bank. According to a report in Economic Times, Sharma, founder of Paytm and part-time chairman of
Paytm Payments Bank
, considered resigning from the latter’s board and removing ‘Paytm’ from its name to quell mounting regulatory and compliance pressures on the fintech major.
The report quotes people aware of the matter.
Timeline of these discussions
The discussions regarding dropping Paytm name from the Paytm Payments Bank name is reported to have taken place late last year against the backdrop of queries from the Reserve Bank of India (RBI) on compliance concerns.
“There was a discussion at the board level for him to step back amid rising queries from the regulator. The show cause notice on compliance issue was expected around December,” a person aware of the matter said. “There was an idea that they should remove Paytm to maintain arm’s length distance between the bank and the Paytm app. This was something that was flagged by RBI earlier also with regards to Paytm Mall – ecommerce – being there on the main app,” this person told the publication.
It is not clear why the proposal was not formally presented before the board and also sent to the regulator. Also it is not exactly known as to why Sharma did not carry out his plan and remained on the board of Paytm Payments Bank.
Sharma is a 51% owner of the payments bank while the rest is held by One 97 Communications – the parent of Paytm brand and the app.
Independent directors resign from PPBL board
Two independent directors are learnt to have resigned from the board of Paytm Payments Bank. Shinjini Kumar and Manju Agarwal have quit the company's board, sources said. These include Shinjini Kumar, a former Bank of America and PricewaterhouseCoopers (PwC) executive, resigned in December, said the people cited above. The second board member - Manju Agarwal, a former deputy managing director of State Bank of India (SBI) - is also said to have exited the board, according to reports.
People aware of banking rules said the payments bank needs to have more independent directors than executive directors due to which Kumar had to attend the board meetings as a special invitee.
With the latest exits, the bank’s board currently consists of three independent directors including Arvind Kumar Jain, former executive director, Punjab & Sind Bank; former Accenture managing director Pankaj Vaish; and former Department for Promotion of Industry and Internal Trade (DPIIT) secretary Ramesh Abhishek.
From One 97 Communications, the board includes group head of regulatory affairs Dr Srinivas Yanamandra, as well as chief operating officer and president Bhavesh Gupta. Paytm founder Sharma and Payments Payments Bank managing director and chief executive officer Surinder Chawla are the other members on the board.
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