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India’s Paytm Obtains License for Third-Party App Following Restrictions Imposed on Bank Unit

The third-party application provider license will enable Paytm to offer payments through the UPI network even as Paytm’s parent firm One97 Communications’ banking unit — Payment Payments Bank — is scheduled to cease operations on Friday. The Reserve Bank of India ordered Paytm in late January to cease operations at Paytm Payments Bank, an affiliate of the financial services firm that processed majority of its transactions. The move created shockwaves through the industry, and also meant that Paytm needed to secure the third-party application provider license to continue many of the Paytm app’s operations. Axis, HDFC, State Bank of India and Yes Bank will serve as payment system provider to the Paytm app, NPCI said Thursday. The RBI had advised NPCI to swiftly issue the third-party application provider license, or TPAP, to Paytm to help mitigate disruptions for its customers.

Kira Kim
March 14, 2024

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– Paytm Payments Bank Board Sees Resignation of Vijay Shekhar Sharma

Vijay Shekhar Sharma, founder and majority owner of Paytm Payments Bank, has stepped down from the board of the troubled unit days after the Indian regulator signalled continuity at the financial firm Paytm. Paytm Payments Bank said Monday it was reconstituting the board of directors at the Paytm Payments Bank, an associate of Paytm, with the appointment of four executives — ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Shri Debendranath Sarangi, former executive director of Bank of Baroda Shri Ashok Kumar Garg, and Retd. The appointment follows the Indian central bank penalizing Paytm Payments Bank, in which Sharma owns a 51% stake, with severe business restrictions. (Paytm owned a 49% stake in Paytm Payments Bank.) TechCrunch reported early this month that the Indian central bank has weighed ordering a board shakeup at Paytm Payments Bank and removing some of the company officials, including Paytm founder Sharma.