Resignations of Independent Directors at Paytm Payments Bank Amid RBI Action
The Indian Reserve Bank, or RBI, after its operations, two independent directors of Paytm’s company Paytm Payments Bank Limited have resigned. According to sources, Shinjini Kumar and Manju Agarwal have resigned from the company’s board.
Now, Paytm Payments Bank’s board has only three independent directors. It includes former Executive Director of Punjab and Sind Bank Arvind Kumar Jain, former MD of Exim Bank Pankaj Vaish, and former Secretary of DPIIT Ramesh Abhishek. So far, no resignation notice has been received from the directors on the company’s side.
Shinjini Kumar has previously worked at Citi Bank, PwC India, and Bank of America Merrill Lynch. Manju Agarwal has worked at SBI for 34 years in various positions. She retired from the position of Deputy MD.
After the RBI’s actions, Paytm’s parent company, One97 Communications (OCL), has formed a group advisory committee on Friday, February 9th. The company announced that the committee is being set up to work with the board to strengthen compliance and governance matters.
Former SEBI chairman M. Damodaran will chair this committee. Mukund Manohar Chitale, a seasoned professional such as the former President of the Institute of Chartered Accountants of India (ICAI), who has been nominated by the RBI, will also be included in the panel.
Chitale is also a former member of the National Advisory Committee on Accounting Standards (NACAS). Additionally, seasoned banking experts like R. Ramachandran, former Chairman and Managing Director of Andhra Bank, will be part of the panel.
On January 31st, RBI imposed a ban on Paytm Payments Bank, citing significant non-compliance with the Prudential Regulations, thereby imposing significant commercial restrictions on Paytm Payments Bank. RBI found major irregularities in Paytm’s KYC process. Millions of accounts were not KYC compliant, and PAN validation was not done for many accounts. Single PAN was used for multiple accounts, and often incorrect information was provided to RBI by banks. RBI also found a large number of inactive accounts.
