Paytm Payments Bank's CEO Surinder Chawla resigns.

Surinder Chawla has resigned. It seems like it has come at a difficult time for Paytm Payments Bank Ltd, which has been facing prohibitory action from the RBI since January 31. I hope the situation improves soon.

Paytm Payments Bank's managing director and CEO Surinder Chawla. According to a regulatory filing by Paytm brand owner One97 Communications, Chawla has resigned from the company on account of personal reasons. It's unfortunate that his resignation comes at a time when Paytm Payments Bank Ltd (PPBL) is facing prohibitory action from the Reserve Bank of India (RBI).

Chawla had joined PPBL in January last year, and he will be relieved from his duties from June 16, 2024. It's good to know that PPBL's board has been reconstituted with five independent directors including an independent chairperson, and no nominees from the company. In line with the company's ongoing efforts, it's great to see that they continue to collaborate with banking partners to enhance their merchant acquiring and UPI services.

RBI's prohibitory action against Paytm

It appears that on January 31, 2024, Paytm Payments Bank Limited (PPBL) was directed by the RBI to shut down its operations by March 15 due to regulatory issues and supervisory concerns, which caused a significant drop in Paytm's stock price. Following the directive, PPBL was no longer permitted to accept fresh deposits or conduct credit transactions after February 29. Nonetheless, the central bank extended the deadline to March 15 on February 16.

On March 14, the National Payments Corporation of India (NPCI) authorized One97 Communications, the parent company of Paytm, to join the unified payments interface (UPI) services as a third-party application provider under a multi-bank model.

As a result, Paytm is now offering payment services in collaboration with four new banks, which are Axis Bank, HDFC Bank, State Bank of India, and Yes Bank, who will act as its payment system provider. Since the RBI's decision against its banking unit, Paytm's shares have plummeted by almost 50%. On April 9, One97 Communications' stock price closed 1.95% lower at ₹404.30 per share on the BSE.