Days after the intensified crisis, the board of Paytm’s parent company, One97 Communications Ltd (OCL), announced the setting up of a three-member group advisory committee to strengthen corporate governance matters within the firm.
Meanwhile, the Paytm Payments Bank has also floated a request for proposal (RFP) from external auditors.
The committee will be headed by former Securities and Exchange Board of India (Sebi) chairman M Damodaran and will work with the OCL board to strengthen compliance and regulatory matters, the company said in an exchange filing.
Other members of the board are Mukund Chitale, former president of the Institute of Chartered Accountants of India; and Ramachandran Rajaraman, former chairman and managing director of Andhra Bank, and a member of the advisory board of the Central Vigilance Commission.
The panel will consider adding more members if necessary.
“The company’s management is committed to driving sustainable business growth while adhering to a regulatory and compliance framework,” OCL said.
Reports have suggested that the talks on partnerships for nodal accounts between Paytm and banks were nearing completion. Nodal accounts are bank accounts opened by intermediaries to hold funds on behalf of customers and vendors.
In response to regulatory action against the payments bank, the regulator announced the termination of nodal accounts of One97 Communications and Paytm Payments Services by February 29.
Earlier, a group of start-up founders has written to the Prime Minister, the Finance Minister, and the Reserve Bank of India (RBI), urging a review of the regulator’s directive ordering the cease of its major banking services.
Concerns over large-scale know-your-customer violations, leading to money-laundering concerns, prompted regulatory actions against Paytm Payments Bank by the RBI.
Other concerns included not maintaining an arm’s length with the promoter group (OCL), non-disclosure of payments to promoters, false submissions of compliance, and an overall sense of disregard for compliance and transparency.