NEW DELHI/BENGALURU : As the fintech firm Paytm crisis deepens, industry experts have raised various questions including the role of Paytm Bank Board. Also, the regulatory action against Paytm Payments Bank has reignited discussions about the proposed cap of a 30% market share by volume for UPI apps.
Paytm, which denied facing the Enforcement Directorate probe, assured employees that there is nothing to worry about. In a town hall, Paytm founder Vijay Shekhar Sharma, addressed employees and said there would not be layoffs. “We are not completely sure of things…like what exactly went wrong. But we will figure out everything soon. We will reach out to the RBI to see what can be done,” Sharma told employees during the town hall meeting.
“This development adds another layer to the ongoing debate surrounding market regulations and the future landscape of digital payment platforms. Sharma’s leadership will be crucial in steering Paytm through challenges, ensuring operational stability, and rebuilding trust,” said Somdutta Singh, serial entrepreneur, founder and CEO of Assiduus Global Inc, LP Angel Investor.
Singh said this crisis prompts a collective reflection within the sector on the importance of compliance and regulatory adherence. Experts pointed out there are five independent directors and asked what action the board took as the central bank started flagging concerns even in 2022. Vijay Shekhar Sharma is the part-time Chairman in the Paytm Payments Bank.
At the recent investor call, Madhur Deora, President and Group CFO at Paytm, said, “There may be this impression that Paytm and Paytm Payments Bank is one. But by design and by structure, it is not and it cannot be. First of all, it’s an associate company and second is not an associate company in the sense that it’s a bank.” “It is a tricky situation in that sense because an associate of yours has to make independent decisions. But if those decisions and those actions then are found to be incomplete or wanting from the regulator, and obviously, it has reputational risk on all of us,” he added.
Meanwhile, One97 Communications denied reports of probe or violation of foreign exchange rules by the company or its associate Paytm Payments Bank. “Such media reports are misleading, baseless and malicious, which harm the interests of all our stakeholders,” the company said.