 "Paytm readies three-member group advisory committee; RFP for auditors")
The board of One97 Communications Ltd (OCL), the parent company of Paytm, on Friday announced the setting up of a three-member group advisory committee to strengthen corporate governance matters within the firm. Paytm Payments Bank also floated a request for proposal (RFP) from external auditors.
Former Securities and Exchange Board of India (Sebi) chairman M Damodaran will head this committee and work with the OCL board to strengthen compliance and regulatory matters, the company said in an exchange filing.
These decisions came a day after the Reserve Bank of India (RBI) clarified that it had barred Vijay Shekhar Sharma-led payments Bank from conducting most of its operations, including deposit-taking and fund transfers, with effect from March 1 due to “persistent non-compliance”.
The other members are Mukund Chitale, former president of the Institute of Chartered Accountants of India; and Ramachandran Rajaraman, former chairman and managing director of Andhra Bank, and a member of the advisory board of the Central Vigilance Commission. The panel will consider adding more members if necessary.
“The company’s management is committed to driving sustainable business growth while adhering to a regulatory and compliance framework,” OCL said.
ON ALERT
- Group advisory committee to have 3 members
- Former Sebi chairman M Damodaran to chair the committee
- Other members are Mukund Chitale, former president, ICAI, and Ramachandran Rajaraman, CMD, Andhra Bank
- Committee can induct additional members if necessary
Meanwhile, Paytm Payments Bank has floated a request for proposal (RFP) from external auditors for an audit of the company's compliance processes.
Sources in the know also claimed that talks on partnerships for nodal accounts between Paytm and banks were nearing completion. The names of the banks are not immediately known.
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Nodal accounts are bank accounts opened by intermediaries to hold funds on behalf of customers and vendors. In response to regulatory action against the payments bank, the regulator announced the termination of nodal accounts of One97 Communications and Paytm Payments Services by February 29.
Queries sent to Paytm regarding its RFP and the status of partnership talks did not elicit a response till the time of going to press. The OCL shares closed 6.09 per cent lower at Rs 419.85 apiece on the BSE on Friday.
Last week, concerns over large-scale know-your-customer violations, leading to money-laundering concerns, prompted regulatory actions against Paytm Payments Bank.
Other concerns included not maintaining an arm’s length with the promoter group (OCL), non-disclosure of payments to promoters, false submissions of compliance, and an overall sense of disregard for compliance and transparency.
In a separate note, OCL denied reports of an Enforcement Directorate investigation against the company, its associates, and the founder and chief executive.
The banking regulator had on Thursday clarified that its directive issued last month concerned Paytm Payments Bank, not the Paytm app. The RBI also announced plans to release a list of frequently asked questions (FAQs) on the payments bank issue next week.