As a result of chronic non-compliances and ongoing major supervisory concerns within the bank, the Reserve Bank has prohibited the PPBL from accepting deposits and credits from any customer after March 15th.
Sharma owns 51% of Paytm Payments Bank, while One 97 Communications, as Paytm is known, owns the balance.
Paytm Payments Bank CEO Surinder Chawla said the new board members' skills will be "pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices".
Due to RBI's crackdown on payments bank non-compliance and supervisory issues, the decision was made.
The banking authority ordered the fintech firm to suspend banking after February 29 and later prolonged it to March 15.
“The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” the RBI stated on its website.
In Focus podcast: Why did RBI restrict Paytm? One 97 Communications Ltd (OCL) control the Paytm brand.
Concurrently with this information, the company was informed that Vijay Shekhar Sharma, to facilitate this transition, had also tendered his resignation from the Board of Paytm Payments Bank. "PPBL has informed us that they wish to commence the procedure for selecting a new chairman," the filing continued.
Furthermore, OCL conveyed its endorsement of PPBL's determination to eliminate its nominee in favor of selecting an executive and independent directorate for the board.
The petition asserts that "a reconstituted Board will assume leadership of PPBL's forthcoming operations."
The RBI said the bank cannot accept deposits, credit transactions, or top-ups on customer accounts, prepaid instruments, wallets, or road toll cards. Credits for interest, cashbacks, and refunds are available anytime.
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