Paytm Payments Bank adds IAS officers, PSU bankers to board

Paytm Payments Bank Ltd (PPBL) has reconstituted its board of directors by appointing four new independent directors, days after regulatory action by the Reserve Bank of India (RBI).

The new appointments come weeks after the RBI barred PPBL from onboarding new customers and directed it to stop taking fresh deposits from existing customers over violations of regulatory requirements.

The four newly inducted independent board members are banking and government veterans – former Central Bank of India Chairman Srinivasan Sridhar, ex-IAS officer Debendranath Sarangi, former Bank of Baroda executive Ashok Kumar Garg, and retired bureaucrat Rajni Sekhri Sibal.

PPBL’s parent company, One97 Communications Ltd (OCL), has also withdrawn its nominee from the PPBL board. Additionally, OCL founder Vijay Shekhar Sharma has stepped down as the part-time non-executive chairman.

“PPBL has informed us that they will commence the process of appointing a new Chairman,” One97 Communications, aka Paytm, said.

The board reconstitution and the induction of experienced banking professionals is seen as an attempt to reassure regulators after recent criticism over compliance issues.

Srinivasan Sridhar is a veteran banker with over 40 years of experience. Former Chairman of Central Bank of India and held leadership positions at EXIM Bank, National Housing Bank. Brings deep banking expertise.

Debendranath Sarangi is a retired IAS officer of Tamil Nadu cadre. Served in various secretary positions in government. Currently, he is independent director in companies like Voltas.

Ashok Kumar Garg has 39 years of banking experience, including as Executive Director of Bank of Baroda. Held leadership roles in Bank of Baroda’s overseas subsidiaries.

Rajni Sekhri Sibal is retired IAS officer who served as Secretary in Government of India. Currently serves as independent director and external monitor in public and private sector companies.

“The distinguished expertise of the new board members will be pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices,” PPBL MD&CEO Surinder Chawla said.

The RBI action against PPBL earlier this year highlighted concerns over effective oversight and compliance culture at the bank. The new board is expected to address these gaps.

However, rebuilding trust with banking regulators will be critical for PPBL which reported losses for two successive years amid growing competition in the digital payments space in India.