Regaining Trust? Paytm Forms Panel Headed by Ex-Sebi Chief To Address Regulatory Concerns

Fintech firm One97 Communications, which owns the Paytm brand, on Friday announced the setting up of a group advisory committee headed by former Sebi Chairman M Damodaran, amid its associate payments bank entity facing regulatory action for non-compliance with RBI norms.

The committee will advise the company on strengthening compliance and on regulatory matters, according to a stock exchange filing.

Paytm advisory committee members

Former President of the Institute of Chartered Accountants of India (ICAI) M M Chitale and former Chairman and Managing Director of Andhra Bank R Ramachandran are part of the panel chaired by Damodaran.

“The Group Advisory Committee will work closely with the board. The committee will induct additional members, as necessary,” the filing said.

Chitale has also served as a governing council member of the Banking Codes and Standards Board of India nominated by the Reserve Bank of India (RBI).

Among other responsibilities, Damodaran had chaired high-powered committees for the Union government, RBI and was also elected Chairman of the EMC of the International Organisation of Securities Commission (IOSCO), the filing said.

The setting up of the committee comes at a time when Paytm Payments Bank Ltd, majorly owned by Paytm Founder and CEO Vijay Shekhar Sharma, has come under scrutiny of RBI.

On January 31, RBI directed the Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29.

RBI said the action was taken due to persistent non-compliance by the entity with regulatory guidelines.

RBI on Thursday said that the regulatory action is against Paytm Payment Bank Ltd (PPBL) and Paytm App will not be impacted by it.

“Just one clarification, this particular action is against Paytm Payments Bank and not to be confused with Paytm App…App is not impacted by this action,” RBI Deputy Governor Swaminathan J said in the media interaction after the bi-monthly Monetary Policy Committee (MPC) meeting.

Acknowledging that the RBI has received feedback from the wider public, RBI will be coming out with a set of FAQ (frequently asked questions) to assuage the concerns.