New Delhi: Paytm Payments Bank independent director Manju Agarwal has reportedly resigned from the board following an RBI order that imposed restrictions on the financial institution’s operations. According to a supply, Agarwal resigned with impact from February 1.
An e mail question despatched to PPBL didn’t elicit any reply. “Paytm Payments Bank independent director Manju Agarwal has resigned from the company’s board after RBI order,” the supply mentioned.
RBI order to Paytm Payments Bank
The RBI issued a directive on January 31, instructing Paytm Payments Bank to stop accepting deposits or top-ups in buyer accounts, wallets, FASTags, and different devices after February 29.
Paytm Payments Bank Limited (PPBL) is an affiliate of One97 Communications Limited (OCL). One97 Communications holds 49 per cent of the paid-up share capital (instantly and thru its subsidiary) of PPBL. Vijay Shekhar Sharma has a 51 per cent stake within the financial institution.
The RBI mentioned that regardless of repeated reminders and steering, Paytm continued to violate regulatory tips, prompting the RBI to take strict motion towards the fintech firm.
Paytm app not impacted by directives
The RBI on Thursday mentioned that the regulatory motion is towards Paytm Payment Bank Ltd (PPBL) and Paytm App is not going to be impacted by it. “Just one clarification, this particular action is against Paytm Payments Bank and not to be confused with Paytm App…App is not impacted by this action,” RBI Deputy Governor Swaminathan J mentioned within the media interplay after the bi-monthly Monetary Policy Committee (MPC) assembly.
Asked if banks can accomplice with Paytm pockets, he mentioned it’s a enterprise choice and so they have to hold out required due diligence as per their board-approved coverage. “I am sure they will carry out due diligence if they have got to do a partnership,” he mentioned.
During the briefing RBI Governor Shaktikanta Das mentioned there are a whole lot of questions and issues within the minds of individuals about PPBL, and the Reserve Bank might be popping out with an in depth FAQ (continuously requested questions) subsequent week which can make issues clear.
Paytm CEO meets Finance Minister
A couple of days in the past Paytm CEO Vijay Shekhar Sharma held discussions with Finance Minister Nirmala Sitharaman. The assembly adopted the Reserve Bank of India’s (RBI) stringent directive issued on January 31, which mandated an instantaneous halt to the onboarding of recent prospects by Paytm Payments Bank and known as for a cessation of its key banking companies post-February 29.
The RBI’s choice was prompted by “persistent non-compliances and continued material supervisory concerns” recognized throughout the financial institution. Consequently, Paytm Payments Bank was directed to stop extra deposits, withdrawals, and top-ups throughout varied customer-related monetary devices, together with wallets, accounts, pay as you go gadgets, and National Common Mobility Cards (NCMC).
The regulatory motion had a profound affect on Paytm, with shares of its guardian firm, One97 Communications Ltd, experiencing a pointy decline. Over two days, from January 31 to February 2, 2024, the corporate’s market capitalization decreased by Rs 17,378.41 crore, reflecting a 36 p.c drop in share worth.
In response to the RBI’s directives, Paytm requested an extension of the February 29 deadline and sought readability relating to the switch of licences for pockets enterprise and FASTag operations. However, no decision or remedial measures have been determined upon throughout the assembly between Sharma and RBI officers.
The disaster prompted a bunch of founders to enchantment to RBI Governor Shaktikanta Das and Finance Minister Sitharaman, urging a evaluation of the regulatory actions imposed on Paytm Payments Bank. They confused the significance of reassessing the proportionality of the restrictions, contemplating their potential affect on the funds financial institution, the fintech ecosystem, and the broader economic system. They additionally advocated for a possibility for Paytm to deal with deficiencies and display compliance.
Despite the challenges, Paytm clarified that neither the corporate nor Vijay Shekhar Sharma are below investigation for any Enforcement Directorate probe or Foreign Exchange Management Act (FEMA) violations. Additionally, rumours of negotiations with Mukesh Ambani for Jio Financial Services to amass Paytm wallets have been dismissed.
(With PTI inputs)
Also Read: Action towards Paytm for “persisted non-compliance”, enough time was given: RBI
