
The parent firm of Paytm, One97 Communications, said that it has chosen to end a number of inter-company relationships with Paytm Payment Bank.
This is done ahead of the Reserve Bank of India's (RBI) March 15 deadline for Paytm Payments Bank to shut down important services including wallets and deposits.
"Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the Board of Directors of the Company, on March 1, 2024, at 07:28 a.m. (IST), through circulation, has approved the discontinuation of various inter-company agreements with its associate entity, Paytm Payments Bank Limited (PPBL)," the business stated in a statement.
In addition, the PPBL shareholders have decided to streamline the Shareholders Agreement (SHA) in order to facilitate PPBL's governance, which is separate and apart from its shareholders. On March 1, 2024, the OCL Board approved the SHA revision and termination of agreements," the statement continued.
It's important to remember that Paytm previously declared that it will collaborate with other banks and take action to guarantee that its merchants and consumers would receive uninterrupted services.
Paytm shares increased by as much as 4% in the wake of the event, having dropped precipitously during the previous two trading sessions.
After the RBI clamped down on the Paytm Payments Bank, Paytm ran into issues because of continuous material supervisory concerns and non-compliance.
Paytm Payments Bank Limited was recently prohibited by the central bank from receiving new deposits or top-ups in client accounts, wallets, FASTags, and other instruments after February 29. The deadline was subsequently extended to March 15.
The board of Paytm Payments Bank Limited was reassembled on February 26, the day Paytm founder Vijay Shekhar Sharma resigned as chairman.
With the appointment of former Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Bank of Baroda Executive Director Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal, the PPBL has reformed its Board of Directors.
49 percent of the paid-up share capital is held by One97 Communications, the company that owns the Paytm brand, both directly and through its subsidiary PPBL. At the bank, Vijay Shekhar Sharma owns a 51 percent share.