Paytm Forms Advisory Committee to Strengthen Compliance Amid Regulatory Scrutiny
- ByStartupStory | February 10, 2024
One 97 Communications Limited, the parent company of Paytm, has established a Group Advisory Committee chaired by former SEBI Chairman M Damodaran to enhance compliance and regulatory oversight in response to recent sanctions. The committee includes Mukund Manohar Chitale, former President of the Institute of Chartered Accountants of India (ICAI), and Ramachandran Rajaraman, former Chairman and Managing Director of Andhra Bank.
In a regulatory filing, the company stated, “The Company’s management is committed to drive sustainable business growth, while adhering to a regulatory and compliance framework.” This move comes amid reports of the resignation of Manju Agarwal and Shinjini Kumar, independent directors of Paytm Payments Bank Ltd (PPBL).
The Employees Provident Fund has instructed its field officers not to accept claims related to Paytm’s banking arm, effective from February 23. Last month, the Reserve Bank of India imposed sanctions on PPBL, directing it to halt all deposits from February 29. Deputy Governor Swaminathan J explained during a press conference after the recent Monetary Policy Committee meeting that these actions were taken due to “persistent non-compliance” with RBI norms, particularly regarding customer KYC. Swaminathan stated, “This is supervisory action on a regulated entity for persistent non-compliance. Such actions are invariably preceded by months, and at times, years of bilateral engagement where we not only point out deficiencies but provide more than adequate time to take corrective action.” Following the sanctions, PPBL is prohibited from accepting deposits, top-ups in customer accounts, prepaid instruments, wallets, and FASTags after February 29.
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