Desk Report, February 04, 2024: In response to the Reserve Bank of India’s (RBI) directive to Paytm Payments Bank Ltd (PPBL) to halt deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after February 29, Paytm’s Group CFO, Madhur Deora, issued a statement emphasizing that “Paytm and Paytm Payments Bank are not one entity.”
Deora clarified that despite the impression that Paytm and Paytm Payments Bank are synonymous, they are distinct entities by design and structure. He highlighted the importance of adhering to banking governance, stating, “For a bank, it has to follow the governance that a bank is supposed to follow. It has to have an independent management team reporting to the board, and matters must go to committees of the board with independent directors.”
The president and Group CFO further explained that a bank requires independent compliance and risk teams. Paytm, as a payments company, has been collaborating with various banks, not limited to its associate, for the past two years. Deora announced plans to accelerate these collaborations, moving away from exclusive partnerships with its associate.
Emphasizing the independence of Paytm Payments Bank, the company clarified in an exchange filing that it holds two board seats as part of its shareholder agreement but exerts no operational influence on the bank. The regulatory filing stated, “OCL exerts no influence on the operations of Paytm Payments Bank Limited other than as a minority board member and minority shareholder.”
As Paytm navigates through regulatory changes, the company aims to expand its payments and financial services businesses in collaboration with multiple banks in the next phase of its journey.
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