Paytm Payments Bank Board is Independent: Vijay Shekhar Sharma

Amid regulatory concerns, Paytm Founder and CEO Vijay Shekhar Sharma said the Paytm Payments Bank operates independently, as Reserve Bank of India's (RBI's) directive takes effect.

He reiterated the independence and capability of Paytm Payments Bank's board in addressing regulatory concerns. While unveiling the new soundbox, Sharma emphasized his detachment from the payments bank, stating, "I, personally or anyone from OCL (Paytm parent One97 Communications), have no connection with the payments bank."

Migration to New PSP Bank Handles Completed, Running on "Yes Bank Backend"

Sharma confirmed the completion of the migration of merchant customers to new PSP bank handles, reassuring stakeholders that the system is operational on the "Yes Bank backend." This statement follows the RBI's directive last month, restricting Paytm Payments Bank from accepting new deposits due to non-compliance with regulatory norms.

Responding to concerns raised by the RBI, Sharma stepped down as the non-executive chairman and board member of Paytm Payments Bank. However, during the virtual press meet, he declined to provide further clarity on the future trajectory of the payments bank, particularly after the recent exit of its managing director and CEO, Surinder Chawla.

Despite regulatory challenges, Sharma highlighted the company's partnership with multiple banks, including Axis Bank, HDFC Bank, SBI, and Yes Bank, to enhance its scalability and revenue opportunities.

Further, Sharma said that Paytm has resumed co-lending business and is looking at new partnerships. 

One97 Communications owns 49% in the payments bank, while Sharma holds the remaining 51%. In February, Sharma stepped down as non-executive chairman and board member of Paytm Payments Bank.

Launch of New Soundboxes Amidst Troubles

In the midst of regulatory scrutiny, Paytm launched two new "Made in India" soundboxes designed to facilitate UPI and credit card payments. These devices boast improved connectivity, sound quality, and battery life, catering to the needs of Indian merchants.

Sharma said that the need for these hybrid soundboxes was felt in the backdrop of a high-noise environment in India. These advanced soundboxes offer better sound quality and battery life, making them better suited to Indian conditions.

Our new device launches.

Proud moment for us to launch fully designed and Made in India #Paytm Soundbox ! 🇮🇳🚀 https://t.co/kfnBMTfsrh pic.twitter.com/n2bhQ43wIy

— Vijay Shekhar Sharma (@vijayshekhar) April 22, 2024

Regulatory Hurdles and Market Response

On January 31, the RBI directed Paytm Payments Bank to cease accepting new deposits in its accounts or digital wallets starting March 15, due to supervisory concerns and ongoing non-compliance with regulations.

Despite efforts to address regulatory concerns, Paytm's shares have witnessed a significant decline since the onset of issues with its payments bank in January. However, recent approvals from the National Payments Corporation of India (NPCI) have allowed Paytm to migrate users to other banks, providing a semblance of stability amidst market turbulence.

Starting from April 17, One97 Communications initiated the process of transferring customers to affiliated payment service provider (PSP) banks such as Axis Bank, HDFC Bank, State Bank of India, and YES Bank. PSPs play a vital role in facilitating the connection between UPI applications and the banking infrastructure. It's important to note that only banks are authorized to operate as PSPs.

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