Vijay Shekhar Sharma steps down from Paytm Payments Bank board amid crisis

Paytm Payments Bank (Paytm PB) has decided to reconstitute the board by inducting former bureaucrats and public sector bankers while removing the founder of Paytm and Chief Executive Officer (CEO) of One97 Communications (OCL) Vijay Shekhar Sharma as part-time non-executive chairman and board member.

“OCL withdraws its nominee from the Paytm PB board, and Vijay Shekhar Sharma steps down as part-time non-executive chairman and board member,” OCL said in a statement to the exchanges.

The development comes weeks after the Reserve Bank of India (RBI) imposed severe restrictions on the payments bank’s operations.

“OCL supports Paytm PB’s move of opting for a board with only independent and executive directors by removing its nominee,” the statement said.

 

The new set of independent directors on Paytm PB’s board includes former Central Bank of India chairman and managing director (MD) Srinivasan Sridhar, retired Indian Administrative Service (IAS) officer Debendranath Sarangi, former Bank of Baroda executive director Ashok Kumar Garg, and retired IAS Rajni Sekhri Sibal. All of them have recently joined as independent directors, OCL said.

“Beyond these, the board has former executive director of Punjab & Sind Bank Arvind Kumar Jain as independent director and Surinder Chawla, MD and CEO at Paytm PB,” OCL said.

Paytm PB will commence the process of appointing a new chairman, the statement said.

Previously, the four independent directors on the payments bank board were Manju Agarwal, Shinjini Kumar, Ramesh Abhishek, and Pankaj Vaish.

Agarwal, a former deputy MD of State Bank of India, resigned from the board of Paytm PB earlier this month citing ‘personal commitments’. While Kumar, a seasoned banker, had exited the board as an independent board member recently, she’s learned to have attended two of its meetings as a special invitee.

The recent reconstitution of the Paytm PB board affirms that Abhishek, a former bureaucrat, and Pankaj Vaish, who’s a startup mentor and former MD of Accenture, have quit the board too.

On January 31, the RBI came down hard on Paytm PB, stating that the comprehensive system audit report and subsequent compliance validation report of external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action.

RBI ordered Paytm PB to stop accepting deposits and credit transactions after February 29, which was later extended to March 15.

“It is my goal to ensure that Paytm PB becomes a paragon of regulatory compliance, setting new standards in delivering exceptional value to the stakeholders, in strict adherence with regulatory frameworks and best practices,” former Central Bank of India chairman and MD Sridhar said.

The new board members emphasised improving the compliance culture of the lender.

“I am wholly committed to applying my expertise to navigate Paytm PB towards a future characterised by operational excellence, ensuring strict compliance with regulatory guidelines and fostering a culture of best practices,” said former bureaucrat Sarangi.