Vijay Shekhar Sharma, founder and primary owner of Paytm Payments Bank, resigned from the board days after the Indian regulator signaled continuity.
Paytm Payments Bank, an associate of Paytm, announced Monday that it was reconstituting its board of directors with four executives as independent directors: ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Shri Debendranath Sarangi, former executive director of Bank of Baroda Shri Ashok Kumar Garg, and Retd. IAS Smt Rajni Sekhri Sibal. The bank unit said that Sharma resigned from the board and his part-time non-executive chair position.
The nomination comes after the Indian central bank imposed harsh business limitations on Sharma’s 51% holding in Paytm Payments Bank. The majority of limitations will take effect on March 15. Paytm held 49% of Paytm Payments Bank. 
Eltrys reported early this month that the Indian central bank may require a Paytm Payments Bank board shakeup and the removal of executives, including founder Sharma.
In 2022, Reserve Bank of India fined Paytm Payments Bank for allowing data to move to servers outside India and without adequately verifying its consumers.
A thorough external audit uncovered “persistent” noncompliances and “continued material supervisory concerns” in the bank, RBI stated late last month. RBI said violation required “further supervisory action.” It confirmed days later that its measures were “proportionate” given the “gravity of the situation.”
Last week, the banking regulator said it was trying to mitigate the damage at Paytm, which used Paytm Payments Bank for most of its transactions.
Goldman Sachs analysts said that RBI’s explanation that @paytm UPI handles may be effortlessly moved to other banks (assuming NPCI granted TPAP clearance to Paytm) addresses a big uncertainty for Paytm (from the recent RBI action against PPBL). In addition, RBI has advised NPCI to examine Paytm’s request to operate as a TPAP (to offer UPI). If approved, Paytm would expect to retain most of its MTU base and continue to monetize such users by cross-selling other products.
