On Friday, One 97 Communications Ltd, the parent company of Paytm, and Paytm Payments Bank Limited (PPBL), announced their decision to discontinue various inter-company agreements, citing the impending ban by the Reserve Bank of India (RBI) on the bank’s operations. The company, in a filing with the Bombay Stock Exchange (BSE), stated that this move is part of an initiative to “reduce dependencies,” with Paytm and PPBL mutually agreeing to terminate inter-company agreements involving Paytm and its group entities. Moreover, shareholders of PPBL have reached a consensus to simplify the Shareholders Agreement (SHA), aiming to reinforce PPBL’s governance independently of its shareholders. The approval for the termination of agreements and the amendment of SHA was granted by the Board of One 97 Communications Ltd on March 1, 2024, as indicated in the filing. Having previously revealed plans to establish new partnerships with other banks, the company is taking steps to ensure seamless services for both customers and merchants. The potential financial impact of these changes was communicated to stock exchanges in an intimation on February 1, 2024. Despite these adjustments, essential services such as the Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines will continue to function without interruption beyond the RBI’s March 15 deadline. Paytm has expressed its unwavering commitment to maintaining the highest standards of market-leading innovation and technology-enabled solutions for its customer base.
In a noteworthy development from the previous month, Vijay Shekhar Sharma, the Founder and CEO of Paytm, stepped down from the position of Non-Executive Chairman and Board Member of Paytm Payments Bank. Looking ahead, the future business operations of PPBL will be overseen by a reconstituted Board under the auspices of One 97 Communications Ltd, following the RBI ban on the bank’s operations from March 15.