Paytm discontinues inter-company agreements with Paytm Payments Bank

Paytm shares : In an official announcement to the BSE and the NSE, One 97 Communications Ltd (Paytm) has disclosed that both the company and its associated entity, Paytm Payments Bank Limited (PPBL), have implemented additional measures to enhance the autonomy of PPBL's operations. 

To reduce dependencies, Paytm and PPBL have jointly decided to terminate several inter-company agreements with Paytm and its affiliated entities. Additionally, the shareholders of PPBL have reached an agreement to streamline the Shareholders Agreement (SHA) to facilitate PPBL's governance independently of its shareholders.

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The Board of One 97 Communications Ltd approved the termination of agreements and amendment of SHA on March 1. Paytm had announced earlier that it would sign up new partnerships with other banks and take measures to provide seamless services for its customers and merchants.

In its intimation to stock exchanges on February 1, the company had indicated the possible financial impact.

The filing also clarified that, One 97 Communications Limited and its services that include the Paytm app, Paytm QR, Paytm soundbox and Paytm Card machines will continue to work uninterrupted.

The filing added that Paytm is committed to uphold the highest standards of market leading innovation and technology enabled solutions for its customers.

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On February 26, One 97 Communications Ltd (OCL) announced that its associated bank, Paytm Payments Bank Limited, had restructured its Board of Directors. The new appointees include Srinivasan Sridhar, former Chairman of Central Bank of India, Debendranath Sarangi, retired IAS officer, Ashok Kumar Garg, former Executive Director of Bank of Baroda, and Rajni Sekhri Sibal, retired IAS. 

Additionally, founder Vijay Shekhar Sharma resigned from the Board of Paytm Payments Bank to facilitate this transition.

(With inputs from agencies)