Surinder Chawla resigns as CEO of Paytm Payments Bank
In March, Praveen Sharma, Senior Vice President at Paytm, had resigned from his role at the fintech company citing his interest in pursuing other opportunities.
Surinder Chawla has resigned from the post of Managing Director and CEO at Payments Bank Limited (PPBL), citing personal reasons and career advancement.
"As informed earlier, nearly all agreements between the Company and PPBL have been terminated as per our disclosure on March 1, 2024, and the board of PPBL has been reconstituted with five independent directors including an Independent Chairperson, and no nominees from the Company, as per our disclosure on February 26, 2024," Paytm parent One97 Communications said in a regulatory filing.
His resignation will be effective on June 26, 2024.
Chawla's exit follows Praveen Sharma's resignation as Senior Vice President at Paytm last month, citing his interest in pursuing other opportunities.
In February, Vijay Shekhar Sharma had resigned from the Board of Paytm Payments Bank Ltd (PPBL), relinquishing his role as part-time non-executive chairman amid restructuring efforts within the troubled bank.
On March 1, Paytm's Board approved the discontinuation of inter-company agreements with its associate entity, Paytm Payments Bank Limited (PPBL), aiming to simplify governance and support PPBL independently. The company made the decision in light of the Reserve Bank of India's (RBI) restrictions on PPBL.
Paytm Payments Bank failed to put in place an internal mechanism to "detect and report" suspicious transactions as stipulated under the anti-money laundering law and was unsuccessful in conducting due diligence of its payout service, the Financial Intelligence Unit said in its order that imposed a fine of Rs 5.49 crore on the digital entity.
The federal financial intelligence gathering and dissemination agency said in its March 1 order that these charges against the bank, a registered reporting entity with the FIU under the PMLA, were "substantiated" after more than four years of investigation and a show cause notice that was issued against it on February 14, 2022.
After the Union Finance Ministry issued a press statement on the FIU action, a Paytm Payments Bank spokesperson had said that the penalty pertains to issues within a business segment that was discontinued two years ago. "Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU)," the spokesperson had said.
The Paytm Payments Bank Ltd (PPBL) has been facing legal trouble after the RBI directed it to stop accepting fresh deposits from customers with effect from February 29, a deadline which was later extended to March 15.
To ensure uninterrupted services, Paytm sought new partnerships with other banks. The National Payments Corporation of India (NPCI) authorised One97 Communications Ltd to onboard Unified Payments Interface (UPI) as a Third-Party Application Provider (TPAP). Four banks, including Axis Bank, HDFC Bank, State Bank of India, and YES Bank, were designated as Payment System Provider (PSP) banks. YES Bank was also chosen as the merchant acquiring bank for Paytm.
(With inputs from PTI.)
Edited by Kanishk Singh