For the third consecutive session, one 97 Communications Ltd. (Paytm) experienced a 5% increase in its shares on Tuesday. The fintech behemoth said that its founder, Vijay Shekhar Sharma, has resigned as non-executive chairman of Paytm Payments Bank (PPBL) in order to support the payments bank throughout its transition. At Rs 449.30 on the BSE, the Paytm stock reached its five percent circuit limit. Nevertheless, the scrip quickly into the red. However, as the day went on, the stock was down 0.57% at Rs 425.50 as foreign brokerage Macquarie stuck with its 'underperform' recommendation on the sock, with a target price of Rs 275.
Paytm announced in a filing to the BSE that a reconstituted board, headed by retired IAS Debendranath Sarangi, former executive director of Bank of Baroda Shri Ashok Kumar Garg, former chairman of the Central Bank of India Srinivasan Sridhar, and retired IAS Rajni Sekhri Sibal, would oversee PPBL's future operations. From its February 16 low of Rs 318.35, the stock has increased by 33%.
According to Macquarie, Sharma was attempting to extract some value from PPBL and was communicating to the RBI that he was prepared to cede control of the league by resigning from the board. According to ET NOW, Macquarie stated that while the RBI could have to provide PPBL some leeway to survive, the brokerage company does not anticipate that the central bank would ever approve any third party transactions involving Paytm and PBBL.
"By withdrawing its candidacy, OCL supports PPBL's decision to choose a board composed only of independent and executive directors. In order to facilitate this transition, Vijay Shekhar Sharma has also resigned from the Paytm Payments Bank Board, the Company has been told separately. Paytm stated in a BSE filing that "PPBL has informed us that they will begin the process of appointing a new Chairman."
The National Payments Corporation of India (NPCI) was requested by the central bank last week to assess Paytm's application to become a third-party supplier of applications. This occurred when the RBI barred PPBL from accepting new credit transactions, deposits, or top-ups in any client accounts, wallets, prepaid cards, FASTags, or NCMC cards.
According to a Reuters report, Paytm is expected to collaborate with Axis Bank, HDFC Bank, YES Bank, and State Bank of India (SBI) in order to process payments using the unified payments interface (UPI). According to a different story from last week, YES Bank and HDFC Bank submitted an application to the NPCI to become third-party application providers (TPAPs) in order to operate the Unified Payments Interface (UPI) mobile payments platform.
