Paytm shares in focus as Vijay Shekhar Sharma steps down from payments bank board

Shares of One 97 Communications Ltd (Paytm), which have hit upper circuit limits in the last two sessions, are in focus on Tuesday morning after the fintech major said it withdrew its nominee from the Paytm Payments Bank (PPBL) board and that founder Vijay Shekhar Sharma stepped down as part-time non-executive Chairman and board member of the associate company.

In a filing to BSE, Paytm said PPBL's future business would be led by a reconstituted board, which would be led by ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS Debendranath Sarangi, former Executive Director of Bank of Baroda Shri Ashok Kumar Garg, and retired IAS Rajni Sekhri Sibal.

“OCL supports PPBL’s move of opting for a board with only independent and executive directors by removing its nominee. The Company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing a new Chairman,” Paytm said.

The RBI last week asked the National Payments Corporation of India (NPCI) to examine a request from Paytm to become a third party application provider and to facilitate four-to-five banks to act as service providers for it. This is after the RBI stopped PPBL from taking any fresh deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards.

A Reuters report suggested that Paytm is likely to partner with HDFC Bank, YES Bank, State Bank of India (SBI) and Axis Bank for processing of transactions via the unified payments interface (UPI). Another report last week suggested that HDFC Bank and YES Bank had applied for the third-party application provider (TPAP) with the NPCI for running the mobile payments platform Unified Payments Interface (UPI).