India’s Paytm discontinues inter-company agreements with its payments bank

INDIA’S Paytm and its funds financial institution unit have mutually agreed to discontinue varied inter-company agreements within the course of to scale back dependencies, the embattled funds agency mentioned on Friday (Mar 1).

Paytm, formally often known as One 97 Communications, didn’t specify what agreements had been being terminated.

The funds financial institution agreed to simplify the shareholders’ settlement to “support (Paytm Payments Bank’s) governance, independent of its shareholders”, the corporate mentioned.

Paytm CEO Vijay Shekhar Sharma owns a 51 per cent stake in Paytm Payments Bank whereas Paytm owns the remaining.

The transfer got here days after Sharma stepped down as non-executive chairman and board member of the funds financial institution unit, as a part of a significant overhaul that follows a central financial institution clampdown.

The Reserve Bank of India had requested Paytm Payments Bank to wind down operations by Mar 15 as a consequence of persistent compliance points and supervisory considerations, triggering a meltdown in Paytm’s inventory.

The motion in opposition to the unit adopted considerations together with insufficient buyer identification checks and a scarcity of arms-length distance from guardian firm Paytm, sources beforehand advised Reuters. REUTERS