Why did Paytm CEO Vijay Shekhar Sharma leave the Payments Bank board?

Amidst the difficulties of Paytm, Vijay Shekhar Sharma has resigned from the post of part-time non-executive chairman and board member. He took this decision after the ban imposed by RBI. Reserve Bank of India (RBI) has fined Paytm Payments Bank Ltd. for not complying with the rules. He has been barred from accepting any new deposits or 'top up' from customers after March 15.

Vijay Shekhar Sharma was the part-time non-executive chairman of Paytm. After his resignation, the board has been reconstituted. Former Central Bank of India Chairman Srinivasan Sridhar, former Bank of Baroda Executive Director Ashok Kumar Garg and two retired IAS have been included in the board.

Vijay Shekhar Sharma holds 51 percent stake in Paytm Payments Bank. Paytm's parent company One 97 Communications has also removed its nominee Vijay Shekhar. Vijay has said that his resignation and appointment of independent directors is a strategic step to ensure smooth transition and enhance the government structure. The move is also being seen as an attempt to separate their Paytm payments bank unit and position and establish themselves as an independent entity.

The regulatory challenges faced by Paytm have affected its stock rate. It has declined significantly since the RBI order. However, the stock has shown signs of recovery, thanks to Paytm's partnership with new banking institutions and the RBI extending the deadline to shut down the operations of the payments bank.

Finance Minister Nirmala Sitharaman on Monday called a meeting with representatives of the fintech industry to discuss their concerns and issues. However, according to Reuters report, according to two government officials present there, the development of Paytm Payments Bank was not specifically discussed during this meeting.

In response to the crisis, the Finance Ministry announced plans to hold discussions with law enforcement agencies and fintech firms in the future, this information was given in a statement issued by the ministry. The purpose of the upcoming meeting is to facilitate communication between fintech firms and various enforcement agencies. The concerns raised by some listed fintech companies regarding their ownership structure will be investigated by both the central bank and the government. This step is indicative of a broader effort to increase transparency and accountability in the fintech sector.