Paytm Clarifies Distinction Between Itself and Paytm Payments Bank Amid RBI Directive

Introduction:

Following recent regulatory scrutiny and the Reserve Bank of India's directive to Paytm Payments Bank, Paytm seeks to clarify the distinction between itself and its associate. Madhur Deora, President and Group CFO at Paytm, underscores the structural independence between the two entities and reaffirms the company's collaborative approach with various banking partners.

Key Points:

1. Structural Independence: Madhur Deora emphasizes that Paytm and Paytm Payments Bank are distinct entities by design and structure. As an associate company, Paytm Payments Bank operates independently, adhering to banking regulations and governance standards.

2. Banking Compliance: Deora highlights the necessity for a bank to maintain independent management, compliance, and risk teams. Paytm Payments Bank follows stringent governance protocols, with its management reporting to the board and independent directors overseeing critical matters.

3. Collaborative Approach: Paytm clarifies its collaborative model, stating that it works with various banks, not exclusively with its associate. Over the past two years, Paytm has collaborated with multiple banking partners and plans to further expand its services in partnership with other banks.

4. Board Representation: As per regulatory guidelines, Paytm holds two board seats on Paytm Payments Bank. However, the company asserts that it exerts no operational influence on the bank's activities beyond its minority shareholder and board member roles.

Conclusion:

Paytm emphasizes the structural independence between itself and Paytm Payments Bank, aiming to dispel misconceptions amid regulatory scrutiny. With a collaborative approach to banking partnerships, Paytm reaffirms its commitment to expanding its financial services while adhering to regulatory standards and governance protocols.