Paytm Owner Breaks Inter-Company Pacts With Paytm Payments Bank
Source: Paytm Payments Bank

Paytm Owner Breaks Inter-Company Pacts With Paytm Payments Bank

Additional measures have been taken to pursue independent future plans

One 97 Communications Ltd., which owns and operates Paytm, said the company and its associate Paytm Payments Bank Ltd. (PPBL) mutually agreed to discontinue various inter-company agreements.

The additional measures, which are part of the process to reduce dependencies, have been taken to pursue independent future plans, the Indian mobile payments and financial services distribution company said in a stock exchange announcement.

“Further, the shareholders of PPBL have agreed to simplify the shareholders’ agreement (SHA) to support PPBL’s governance, independent of its shareholders,” One 97 said.

The company’s board approved the termination of agreements and amendment of SHA today, it added.

The development comes as PPBL is on the radar of the Reserve Bank of India (RBI) over persistent non-compliances and continued material supervisory concerns in the bank. Last month, the RBI said PPBL cannot accept further credits into its customer accounts and wallets after 15 March other than any interest, cashbacks, sweep in from partner banks or refunds, which may be credited anytime.

Following the RBI’s action, PPBL reconstituted its board and Vijay Shekhar Sharma, the founder of One 97, resigned as part-time non-executive chairman of the bank.

Sharma, also the chairman, managing director and chief executive officer of One 97, stepped from the bank’s its board as well to enable the transition.

One 97 today reiterated that the company and its services that include the Paytm app, Paytm QR, Paytm soundbox and Paytm Card machines will continue to work uninterrupted, according to the statement.

One 97 stock gained 3.9% to 418.95 rupees in early Mumbai trading today on the NSE.

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