Paytm founder and CEO Vijay Shekhar Sharma has resigned from his position as the chairman of Paytm Payments Bank, as disclosed in an exchange filing. The decision follows the company's restructuring of its board amidst increased regulatory scrutiny from RBI.

The parent company of Paytm, One97 Communications announced the withdrawal of its nominee Vijay Shekhar Sharma from the board of Paytm Payments Bank. Sharma served as the part-time non-executive chairman and board member of the bank.

Sharma holds a majority stake of 51 percent in Paytm Payments Bank, with One 97 Communications owning the remaining shares.

In addition to Sharma's departure, Paytm announced the appointment of new directors to its board. These include Srinivasan Sridhar, former chairman of the state-owned Central Bank of India, as well as former Bank of Baroda Executive Director Ashok Kumar Garg. Joining them are two retired Indian Administrative Service officers, Debendranath Sarangi and Rajni Sekhri Sibal, who will serve as Independent Directors, according to Paytm.

Further, the board will feature Arvind Kumar Jain, former Executive Director of Punjab & Sind Bank, as an Independent Director, along with Surinder Chawla, who serves as the Managing Director and CEO at Paytm Payments Bank.

Chawla expressed appreciation for the recent additions to the board, stating that it signifies a notable advancement in PPBL’s trajectory. He emphasized that their esteemed expertise will play a crucial role in steering the organization towards strengthening governance frameworks and operational benchmarks, reaffirming their commitment to compliance and adopting best practices.

Last month, the Reserve Bank of India directed Paytm Payments Bank to cease operations due to persistent non-compliance and ongoing material supervisory concerns.

As a result of the RBI's directive, Paytm Payments Bank, the banking division of Paytm, was instructed to halt the acceptance of fresh deposits in its accounts or popular wallets beginning in March.

The RBI's decision dealt a significant blow to Paytm, one of India's largest payment firms, leading to a sharp decline in the company's stock value.

It's worth noting that Sharma's resignation follows the departure of two independent directors earlier, unrelated to the restrictions imposed on the unit by the RBI.

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