Paytm Founder Resigns from Paytm Payments Bank Board, Shares Rally 5%

Paytm shares surged 5% in early trading following the resignation of Vijay Shekhar Sharma from the Paytm Payments Bank board. The stock opened over 3% lower but quickly rebounded, reaching ₹449.30 per share on the BSE.

One97 Communications, the parent company of Paytm, announced the withdrawal of its nominee from the Paytm Payments Bank board, along with Sharma stepping down as Part-Time non-executive Chairman and Board member to facilitate board reconstitution.

The Reserve Bank of India (RBI) recently imposed significant restrictions on Paytm Payments Bank, preventing it from accepting fresh deposits or conducting credit transactions after March 15.

Macquarie, a brokerage firm, suggested that by resigning from the board, Sharma is indicating a willingness to relinquish control of Paytm Payments Bank. Macquarie does not anticipate the RBI authorizing related-party transactions between Paytm and the bank going forward.

The newly reconstituted board of Paytm Payments Bank now includes individuals such as Srinivasan Sridhar, Debendranath Sarangi, Ashok Kumar Garg, and Rajni Sekhri Sibal. Moreover, independent directors and the MD & CEO have also been appointed.

In other developments, the National Payments Corporation of India (NPCI) is reviewing a request from Paytm to become a Third-Party Application Provider (TPAP) for the UPI channel, following RBI’s restrictions.

If approved, Paytm could continue processing payments via UPI but would require the support of several identified banks. At present, Paytm shares are trading at ₹430.75 apiece on the BSE.