Paytm parent One 97 Communications Ltd has announced the resignation of founder Vijay Shekhar Sharma as part-time non-executive chairman and board member at its associate entity Paytm Payments Bank Ltd (PPBL) as part of its restructuring.

"Vijay Shekhar Sharma has resigned from the Board of Paytm Payments Bank. PPBL...will commence the process of appointing a new Chairman," Paytm says via a late evening exchange release.

One97 board on February 12, 2024, had formed a committee to work with its board to strengthen compliance following the RBI's decision against Paytm Bank. It formed a group advisory committee chaired by former SEBI chairman M Damodaran to work with the Board in further strengthening compliance, and regulatory matters.

One97 has now withdrawn its nominee from the Paytm Bank board, and its future business will be led by a reconstituted board.

The reconstitution of Paytm Bank's board has paved the way for the appointment of ex-central bank chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former executive director of Bank of Baroda Ashok Kumar Garg, and retd IAS Rajni Sekhri Sibal. They recently joined as independent directors of the bank.

"OCL supports PPBL’s move of opting for a board with only independent and executive directors by removing its nominee. The Company has been separately informed that Vijay Shekhar Sharma has also 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," Paytm says.

The development marks the departure of Sharma as chairman, who was at the helm of Paytm Bank since 2015 when it received the RBI licence to set up the payments bank.

Paytm Payments Bank, 51% owned by Sharma while the remaining 49% by One 97, has been barred from accepting further credits into its customer accounts and wallets after March 15, 2024.

Surinder Chawla, MD & CEO at Paytm Payments Bank says the appointment of new board members marks a significant step. "Their distinguished expertise will be pivotal in guiding us toward enhancing our governance structures and operational standards."

Sridhar, who brings with him a career spanning over 40 years, says his goal as the board chairman is to ensure PPBL becomes a "paragon of regulatory compliance".

Sridhar is currently serving as the independent director at Jubilant Pharmova. He has held leadership positions at the Export-Import Bank of India, the Central Bank of India and the National Housing Bank.

Sarangi, retired IAS (1977 batch) of Tamil Nadu cadre, is a veteran of public administration and corporate governance. He is currently serving as an independent director on the boards of several companies including Southern Petrochemical Industries Corporation and Voltas, among others.

Sarangi says assuming the role at a critical juncture, his dedication is firmly rooted in adhering to and exceeding the highest standards of regulatory compliance and corporate governance.

Sibal is a retired IAS officer of the Haryana cadre (1986 batch), with 38 years of experience in administration and governance. Paytm says she has served as secretary to the government. Currently, she serves as an independent external monitor in the public sector and as an independent director in corporates.

Garg, with 39 years of diverse banking experience, has held positions including whole-time director at Bank of Baroda, chief executive for USA operations of the bank in New York, managing director of Bank of Baroda (Uganda) Ltd at Kampala and chairman/director of its subsidiaries in Guyana, Trinidad & Tobago and Kenya.

Notably, two independent directors, Manju Agarwal and Shinjini Kumar, had recently resigned from the Paytm Bank board following the RBI's stringent action against the company.

In a positive development for the troubled company, the RBI last week took additional "necessary" steps to ensure seamless digital payments by UPI customers using '@paytm' handle operated by Paytm Payments Bank. The RBI advised the National Payments Corporation of India (NPCI) to examine the request of Paytm's parent to become a “third-party application provider (TPAP)” for the UPI channel for continued UPI operations of the Paytm app. It will minimise concentration risk in the UPI system by having multiple payment app providers, the RBI said.

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