On Monday, Paytm founder Vijay Shekhar Sharma resigned from his position as chairman of Paytm Payments Bank, one week before the Reserve Bank of India (RBI) scheduled a deadline of March 15th for accepting new credits into the company’s client accounts. Furthermore, Paytm’s parent company, One 97 Communications Ltd (OCL), declared that the board of Paytm Payments Bank Limited (PPBL) has been reorganised.
At Paytm Payments Bank Limited, Vijay Shekhar Sharma served as the non-executive chairman on a part-time basis.
The announcement was made weeks after the RBI prohibited Paytm Payments Bank from accepting consumer deposits or credits after March 15 due to the bank’s ongoing substantial supervisory concerns and chronic non-compliance.
“Vijay Shekhar Sharma has 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,” OCL said in a statement.
In the meantime, retired IAS officer Rajni Sekhri Sibal, former executive director of Bank of Baroda Ashok Kumar Garg, retired Central Bank of India chairman Srinivasan Sridhar, and retired IAS officer Debendranath Sarangi have all joined the Paytm Payments Bank board as independent directors.
The Reserve Bank of India requested earlier this month that Paytm Payments Bank merchants and customers move their accounts to other banks by March 15. The RBI has extended the deadline, which was originally set for February 29, 2024, by 15 days in consideration of customer interest.
After March 15, neither salaries nor pensions will be credited to PPBL accounts. Customers who use PPBL to pay for their OTT subscriptions or EMIs must also make other plans.
One97 Communications moved its nodal account from Paytm Payments Bank to Axis Bank on February 16 in order to maintain the Paytm QR, Soundbox, and card machine beyond the RBI’s March 15 deadline. Paytm’s nodal account functions similarly to a master account, serving as the hub for all of its merchant and customer transactions.
In order to ensure that merchants’ transactions continue without interruption following the RBI’s deadline, Paytm is currently collaborating with other banks to modify the virtual payment address associated with PPBL that merchants use to receive payments.
