In a significant strategic move, Paytm has announced the discontinuation of various inter-company agreements with Paytm Payments Bank (PPBL). This decision aims to bolster the independent operations of PPBL and streamline operations within the Paytm ecosystem.
According to a regulatory filing, Paytm stated, “One 97 Communications Ltd (Paytm) and its associate entity, Paytm Payments Bank Limited (PPBL), have introduced additional measures to strengthen their approach towards the independent operations of PPBL.”
This development comes after the Reserve Bank of India directed Paytm Payments Bank to halt its basic banking services from March 16. Earlier, Vijay Shekhar Sharma, the founder of Paytm, resigned from the board of Payments Bank, with new directors, predominantly from the banking and bureaucratic sectors, taking over.
Paytm had previously indicated plans to forge new partnerships with other banks to ensure uninterrupted services for its customers and merchants, anticipating potential financial impacts.
Amid these changes, Paytm assured customers that its core services, including the Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines, would continue without interruption. The company reiterated its commitment to delivering market-leading innovation and technology-enabled solutions.
In a strategic move aimed at decreasing dependencies, Paytm and PPBL have jointly decided to end several inter-company agreements. Furthermore, PPBL shareholders have opted to streamline the Shareholders Agreement (SHA) to bolster the bank’s governance, ensuring independence from its shareholders. The board of One 97 Communications Limited endorsed the termination of agreements and the amendment of SHA on March 1, 2024.
Despite ongoing scrutiny, Paytm remains steadfast in its commitment to providing seamless services, prioritizing innovation and technology for its valued customers.