Paytm Terminates Inter-Business Contracts With Paytm Payments Bank

Paytm and its payments bank unit have agreed to discontinue inter-company agreements to reduce dependencies, according to a statement from the embattled payments firm.

Paytm, also known as One 97 Communications, did not specify the specific agreements being terminated.

The shares of Paytm fell sharply after the Reserve Bank of India ordered Paytm Payments Bank to cease operations by March 15 owing to ongoing supervisory concerns and compliance difficulties.

In order to “support (Paytm Payments Bank’s) governance, independent of its shareholders,” the payments bank consented to streamline the shareholders’ agreement, according to the business.

As part of a significant reform that followed a central bank clampdown, Mr. Sharma resigned from his positions as non-executive chairman and board member of the payments bank business a few days prior to this action.

The shares of Paytm fell sharply after the Reserve Bank of India ordered Paytm Payments Bank to cease operations by March 15 owing to ongoing supervisory concerns and compliance difficulties.

Concerns over insufficient client identity checks and the unit’s lack of arm’s length separation from parent company Paytm prompted the move against it, sources earlier told Reuters.

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