Paytm founder Vijay Shekhar Sharma has resigned as the Director of Paytm Financial Services in wake of Reserve Bank of India's regulation that prohibits a payments bank chairman to also hold a directorial position in an NBFC (non-banking finance company) unless it's a subsidiary of the bank. While Sharma in his resignation letter cited "other preoccupations" as reasons for his inability to continue with the role, reports say it has been done to comply with the RBI norms.
A report published in Financial Express said the letter was sent to Paytm Financial Services Board on December 2, following which the company has appointed Vice President Rohit Lohia as its director. "I hereby tender my resignation as Director of the Company with immediate effect due to other Preoccupations. Kindly acknowledge the receipt and take necessary steps to complete requisite filing in this regard with the office of the Registrar of Companies, NCT of Delhi and Haryana," the letter said.
Paytm had launched its payments bank in India in May 2017, two months before its launch of financial services arm. Ever since then, Sharma was holding the positions of chairman and director at both the companies, respectively. Experts say while Sharma stepping down from the fiduciary position on a separate financial company is a sign of good governance, it also shows that these two companies were actually not following the RBI norms before his resignation.
The daily also mentioned the company's statement saying that with the consent of the board of directors, it had decided to appoint Rohit Lohia as an additional director and he would hold the office as director of the company with immediate effect.
Paytm had recently secured $1 billion in its new financing round taking its valuation to $16 billion. The latest funding led by US-based asset management firm T Rowe Price cemented Sharma-led company's position as India's most-valued startup. This is the largest amount raised by an Indian startup this year. T Rowe Price, along with Discovery Capital and D1 Capital put in about $400 million, while existing investors SoftBank and Ant Financial put in $200 million and $400 million, respectively.
Edited by Manoj Sharma