Paytm parent One 97 Communications forms advisory committee to strengthen compliance

One97 Communications, the parent entity that owns and operates the Paytm brand, has formed a group advisory committee to improve compliance and navigate regulatory challenges.

The three-member committee will be led by former Securities and Exchange Board of India (Sebi) chairman Meleveetil Damodaran, One97 said in a stock exchange filing on Friday.

The other members are Mukund Manohar Chitale, former president, Institute of Chartered Accountants of India (ICAI) and former chairman of the National Advisory Committee on Accounting Standards (NACAS), and Ramachandran Rajaraman, former chairman and managing director of Andhra Bank.

“The group advisory committee will work closely with the board. The Committee will induct additional members, as necessary … The company’s management is committed to drive sustainable business growth, while adhering to a regulatory and compliance framework,” One97 said.

The Noida-based payments and financial services firm has been facing mounting regulatory troubles after its associate entity Paytm Payments Bank Ltd (PPBL) was barred by the Reserve Bank of India from accepting fresh deposits or providing banking services after February 29.

Further, the BSE has sought a clarification from One97 Communications on media reports of independent directors quitting the bank’s board.

At least, two independent directors have stepped down from the bank’s board.

Shinjini Kumar, a former Bank of America and PricewaterhouseCoopers (PwC) executive, resigned in December, said people familiar with the matter. Another independent director, Manju Agarwal, a former deputy managing director of State Bank of India (SBI), is also said to have exited the board, according to media reports.

The abrupt regulatory curbs on PPBL have caused uncertainty among Paytm’s customers and merchant partners. The RBI action is expected to directly impact digital wallets, Fastags and QR codes of Paytm users and merchant base, issued by PPBL if it is not resolved by the February-end deadline.

RBI Governor Shaktikanta Das said on Thursday that the regulator has always laid emphasis on ‘bilateral engagement’ with regulated entities nudging them to take corrective action with ‘sufficient time’ provided to take these steps.