Two Independent Board Directors Have Quit Crisis-Hit Paytm Payments Bank

Even as Paytm Payments Bank has been flung into turmoil following severe restrictions placed by RBI, two of its independent board directors have quit the bank.

Two members of Paytm Payments Bank’s board of directors have quit over the last few weeks. In December, independent board member Shinjini Kumar had resigned from the payment bank’s board. Another independent board member Manju Agarwal too has now quit following RBI’s directives, which essentially cripple the bank’s operations from 1st March. This means that two of the five Independent Directors on Paytm’s board have now resigned.

Shinjini Kumar had been appointed to the board of Paytm Payments Bank in December 2021. She had 31 years of experience in the Indian financial services space, and had held senior roles at companies including Citibank, Pricewaterhouse Coopers India, Bank of America Merrill Lynch and Reserve Bank of India. She had quit the board in December, right before the crisis at Paytm had unfolded, but had attended two board meetings post her resignation as a special invitee to meet RBI rules.

Manju Agarwal had been appointed to Paytm’s board along with Shinjini Kumar in December 2021. She had 34 years of experience in the banking space, most of which was spent at state-owned State Bank of India, where she’d been the Chief Operating Officer. She had also worked with NPCI and Jio Payments Bank. She has resigned from her Paytm Payments Bank’s board position following RBI’s curbs, and her resignation was effective from 1st February 2024. Agarwal’s resignation was prompted by her concerns about associating with Paytm Payments Bank following RBI’s clampdown, and how it could affect her board membership at other companies, a person familiar with the matter told CNBC TV18.

The resignation of two of its directors is the latest blow to Paytm Payments Bank, which had seen its operations be crippled with the RBI had ordered it to stop all deposits and shut down nodal accounts starting 1st March. It had been reported that Paytm had inadequate KYC procedures, which meant that as many as 1000 users at the bank had been linked to the same PAN card. Since then, Paytm’s stock price has nearly halved, and rivals have been swooping in, trying to woo Paytm’s customers. And these moves seem to be working — Paytm’s app downloads have fallen, and as many as 42 percent of kirana stores have already migrated to other payments platforms. And with its board members also resigning, the bleak outlook for Paytm Payments Bank appears to be only getting bleaker.