Explained: Why Paytm CEO Vijay Shekhar Sharma Quit Payments Bank Board
NDTV
The decision follows a series of measures imposed by the Reserve Bank of India (RBI), including an order for Paytm Payments Bank to wind down operations by March 15.
Paytm CEO Vijay Shekhar Sharma on Monday resigned as non-executive chairman and board member of Paytm Payments Bank, amid ongoing regulatory challenges faced by the digital payments giant. The decision follows a series of measures imposed by the Reserve Bank of India (RBI), including an order for Paytm Payments Bank to wind down operations by March 15 due to persistent compliance issues and supervisory concerns.
The RBI's action against the payments bank stemmed from various concerns, including inadequate customer identity checks and a perceived lack of arms-length distance from the parent company, Paytm. These issues prompted a major board overhaul, with former chairman of Central Bank of India, Srinivasan Sridhar, former Bank of Baroda Executive Director Ashok Kumar Garg, and two retired Indian Administrative Service (IAS) officers joining the payments bank's board.
Paytm's decision to reconstruct the board with independent and executive directors is seen as an effort to demonstrate compliance with regulatory norms and salvage the situation. While the RBI did not explicitly mandate the board reconstruction, it is speculated that the move aims to reassure the regulatory body about Paytm's commitment to adhering to norms.
