Paytm's Parent Company One97 Communications Takes Strategic Steps Amid Regulatory Scrutiny

By siliconindia  |  Friday, March 1, 2024

Paytm's Parent Company One97 Communications Takes Strategic Steps Amid Regulatory Scrutiny
In a significant move aimed at reducing dependencies and addressing regulatory concerns, One97 Communications, the parent company of the Paytm brand, has announced the discontinuation of various inter-company agreements with its associate entity, Paytm Payments Bank Ltd (PPBL). As of 11 am, Paytm shares are trading 4.12% higher at Rs 419.90 apiece.
The decision, approved by the Paytm board on March 1, 2024, holds importance as the payment aggregator faces scrutiny from the Reserve Bank of India (RBI) regarding persistent non-compliance with regulations. The move follows the rebound of Paytm shares from a 52-week low of Rs 318 on February 16, though it remains approximately 50% below the closing price of Rs 761.20 on January 31.
In response to regulatory concerns, Paytm had recently inked partnerships with other banks, with Axis Bank being one of the collaborators. The company aims to assure customers, especially merchants, of uninterrupted services amid the ongoing scrutiny.
Vijay Shekhar Sharma, the founder of Paytm, had earlier stepped down from his position on PPBL. The company asserts that essential services, including the Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines, will continue to operate even after the RBI's deadline of March 15.
The shareholders of PPBL have also agreed to simplify the Shareholders Agreement (SHA) to enhance PPBL's governance. These strategic measures are part of One97 Communications' efforts to navigate regulatory challenges and reinforce its commitment to providing seamless services to users.

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