Paytm CEO Vijay Shekhar Sharma has resigned as non-executive chairman and board member of Paytm Payments Bank amid regulatory challenges faced by the digital payments giant.
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NewsTranscript
00:00 Paytm CEO Vijay Shekhar Sharma has resigned as non-executive chairman and board member
00:08 of Paytm Payments Bank amid regulated challenges faced by the digital payments giant.
00:14 The decision comes in the wake of measures imposed by the Reserve Bank of India (RBI),
00:19 including an order for Paytm Payments Bank to wind down operations by March 15 due to
00:25 persistent compliance issues and supervisory concerns.
00:29 The RBI's action stems from various concerns, including inadequate customer identity checks
00:35 and a perceived lack of arm's-length distance from the parent company Paytm.
00:41 This has led to a major board overhaul with notable industry figures joining the Paytm
00:45 Bank's board.
00:46 Paytm's decision to reconstruct the board with independent and executive directors is
00:51 seen as an effort to demonstrate compliance with regulatory norms and salvage the situation.
00:57 Analysts speculate that this move aims to reassure RBI about Paytm's commitment to adhering
01:03 to norms.
01:04 Sharma, who owns a majority stake in Paytm Payments Bank, stated that his resignation
01:09 and the appointment of independent directors were strategic steps to enable a smooth transition
01:14 and enhance governance structures.
01:17 The move is also seen as an attempt to disassociate Paytm from its Payments Bank unit and position
01:22 it as an independent entity.
01:24 The regulatory challenges have impacted Paytm's stock value, witnessing a significant drop
01:29 since the RBI's order.
01:31 However, signs of recovery are evident, attributed to Paytm's strategic partnerships with new
01:36 banking entities and the RBI extending the deadline for winding down the Payments Bank's
01:41 operations.
01:43 In response to the crisis, Finance Minister Nirmala Sitharaman convened a meeting with
01:48 representatives from the fintech industry to discuss concerns and issues.
01:53 However, the developments at Paytm Payments Bank were not specifically addressed during
01:57 this meeting, according to government officials.
02:01 The Finance Ministry has announced plans to hold discussions with Indian law enforcement
02:05 agencies and fintech firms in the near future.
02:08 This move aims to facilitate communication between fintech firms and various enforcement
02:12 agencies, signalling a broader effort to enhance transparency and accountability in the fintech
02:18 sector.
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