Tuesday, July 23, 2024

Paytm Crisis Deepens: What Will Happen Now After Vijay Shekhar Sharma Steps Down as PPBL Chairman?

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Amid the Paytm crisis, Vijay Shekhar Sharma has resigned from his position as part-time non-executive Chairman of Paytm Payments Bank Limited (PPBL), leading to the reconstitution of the bank’s board, as stated in a recent filing. This development comes against the backdrop of the Reserve Bank of India’s (RBI) heightened scrutiny and regulatory actions due to persistent non-compliance and supervisory concerns.

Paytm Crisis

The Paytm crisis gained further attention with RBI’s regulatory action last month, which prohibited PPBL from accepting fresh deposits or top-ups in various customer accounts and instruments after February 29, with the deadline extended to March 15. In response, PPBL has restructured its Board of Directors, appointing distinguished individuals like Ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal as Independent Directors.

The reconstitution of the board reflects PPBL’s commitment to addressing regulatory concerns and enhancing governance standards amidst the ongoing Paytm crisis. Srinivasan Sridhar, with over 40 years of banking experience, emphasized his goal to ensure PPBL’s compliance with regulatory frameworks and best practices, aiming to set new standards in delivering value to stakeholders. Similarly, Debendranath Sarangi and Ashok Kumar Garg pledged to navigate PPBL towards operational excellence and strict adherence to regulatory guidelines, fostering a culture of best practices.

reserve bank of india governor shaktikanta das

Meanwhile, RBI’s recent advisory to the National Payments Corporation of India (NPCI) to explore the migration of PPBL customers using the UPI handle ‘@paytm’ to other banks underscores the gravity of the Paytm crisis. With 30 crore wallets and 3 crore bank customers, PPBL’s actions and regulatory compliance are critical to maintaining stability in the payment ecosystem.

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