Paytm to form advisory panel on compliance and regulatory matters following RBI scrutiny

In the midst of a challenging regulatory environment, Paytm's parent company, One97 Communications on Friday announced the formation of a group advisory committee dedicated to compliance and regulatory matters. This move comes as a response to the Reserve Bank of India's (RBI) recent directive that halted the onboarding of new customers for Paytm Payments Bank due to supervisory concerns and non-compliance with regulations.

The newly established committee is chaired by Meleveetil Damodaran, the former chairman of the Securities and Exchange Board of India (SEBI). The committee's composition includes other notable members such as Mukund Manohar Chitale, past president of the Institute of Chartered Accountants of India (ICAI), and Ramachandran Ramachandran, former chairman and managing director of Andhra Bank. Their collective expertise is expected to guide Paytm through the complexities of regulatory compliance and help restore confidence in the company's operations.

Paytm's proactive approach in forming this advisory committee underscores its commitment to addressing the RBI's concerns and ensuring adherence to the necessary regulatory standards. 

The committee will work closely with Paytm's board to reinforce the company's compliance guardrails, which is crucial for maintaining the integrity of its financial services and protecting the interests of its stakeholders.

On January 31, the RBI prohibited PPBL from accepting deposits, top-ups, and engaging in various financial activities, effective from February 29, due to persistent non-compliance and material supervisory concerns. 

The concerns included violations of regulatory guidelines related to know your customer (KYC), issues with anti-money laundering measures, and failure to maintain a suitable distance from its group company, One97 Communications. 

The scrutiny by the regulator began in 2018, and in October of the previous year, RBI imposed a monetary penalty of Rs 5.39 crore for non-compliance with KYC regulations.

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