Paytm, one of India’s leading digital payment firms, announced on Tuesday that Surinder Chawla, the CEO of its banking arm Paytm Payments Bank, has tendered his resignation citing personal reasons. The resignation, effective from June 26, was confirmed by the company without providing details about Chawla’s successor.
Chawla’s departure comes in the wake of significant changes within Paytm’s leadership, including the resignation of Vijay Shekhar Sharma, the company’s founder, as non-executive chairman of Paytm Payments Bank. This restructuring follows regulatory pressure from the Reserve Bank of India (RBI), which directed Paytm Payments Bank to cease operations by March 15 due to ongoing compliance issues and regulatory concerns.
In response to the Reserve Bank of India (RBI) directive, Paytm has undertaken measures to disassociate itself from its banking arm, including the termination of various inter-company agreements. Despite these challenges, Paytm received a boost when India’s payments authority granted the firm a third-party app license, allowing it to continue facilitating payments post the banking unit’s closure.
Key banks such as Axis Bank, HDFC Bank, State Bank of India, and Yes Bank have been designated as payment system provider banks for Paytm, as confirmed by the National Payments Corporation of India.
Since the RBI’s order against its banking unit, Paytm’s stock has experienced a significant decline, plummeting nearly 50%. The shares settled 2% lower on Tuesday, reflecting ongoing investor concerns amidst the company’s regulatory challenges and leadership changes.