DIE ANOTHER DAY

Having fallen out of favour with investors, shareholders and the Reserve Bank of India in recent months, the cause of Paytm’s current woes is the same that led to its initial quick rise Vijay Shekhar Sharma.

-  Vinita Bhatia, Prathik Desai and Abdul Haleem Sherif

By giving up the chairman’s job at Paytm Payments Bank, he is attempting a Bond-like escape from the wrath of the banking regulator. Will he succeed?  

Vijay Shekhar Sharma (VSS) is a man of grand announcements. Many critical moments in his life—starting one of the earliest payments banks in the country to receiving funding from legendary investor Warren Buffet—were all marked by loud proclamations of ambition and aplomb. But as he lives through one of the most decisive moments of his entrepreneurial career, wherein he seemingly cedes control of the payments bank that was the cornerstone of his fintech universe, the Paytm founder prefers the silent way out.

On February 26, One97 Communications (OCL), the listed entity behind the popular Paytm payments application, disclosed to the stock exchanges that its payments bank arm underwent a major rejig of its decision-making body. “OCL withdraws its nominee from the Paytm Payments Bank board and Vijay Shekhar Sharma steps down as part-time non-executive chairman and board member,” it said.

For those who have followed the Paytm saga, it is common knowledge that Paytm Payments Bank (PPBL) was the defining feature that helped Paytm become a leader in India’s financial technology landscape. Paytm’s popular wallet business was housed within PPBL, and the in-house payments bank allowed Paytm to cut down its dependence on third-party banks in key segments of its digital payments pipeline.

Under the ambitious leadership of VSS, it did not take long for “Paytm karo” to become the slogan of a rapidly digitalised payments market in India. But its penchant for cutting corners and chasing quick growth meant that VSS’s fintech empire, specifically its payments bank entity, attracted close scrutiny from the Reserve Bank of India (RBI).