Paytm’s parent company One 97 Communications Limited (OCL) board agreed to discontinue various inter-company agreements with Paytm Payments Bank Limited (PPBL) on Friday, as well as introduced additional measures to strengthen its approach towards independent operations of PPBL.
In a risky road for Paytm Payments Bank with RBI restricting the bank on a regulatory basis and having Vijay Sharma step down from its board operations, Hindu Business Line reported on Sunday, RBI would not hesitate to cancel the bank’s license.
“If that be the case, an administrator could be appointed at the bank to oversee certain critical aspects,” said a source to the Hindu Business Line.
The fintech firm said the shareholders of PPBL have agreed to simplify the Shareholders Agreement (SHA) to support PPBL’s governance, independent of its shareholders. Additionally, OCL terminated the agreements and amendment SHA on March 1.
Earlier, Paytm said it would collaborate with various banks and implement measures aimed at delivering seamless services to its customers and merchants.
This announcement was made after the central bank and regulatory body of India RBI released an official notice stating Paytm Payments Bank to stop onboarding new customers effective immediately, to which the CEO Vijay Sharma took to X, guaranteeing its users that the payments app will continue to work as usual beyond February 29.
Most recently, OCL partnered with Axis Bank to provide customers online with zero disruptions in merchants’ settlements and minimal as well as replace the nodal account, which OCL previously used with Paytm Payments Bank.
Mobile internet company One 97 Communications is headquartered in Noida, India. Paytm is a leading payment solution provider to e-commerce merchants using its RBI-approved semi-closed wallet.
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