One97 Communications, the parent entity that operates brand Paytm, is fully committed towards building its business according to regulatory compliances and prudent operations risk policies, its founder and chief Vijay Shekhar Sharma said in a shareholder letter, as part of its annual financial filings.
The company along with its group entities will be focusing on greater regulatory engagement and higher focus on compliance, both in letter and spirit, the company said on Wednesday.
“We are fully committed towards building our business according to regulatory compliances and prudent operations risk policies,” said Sharma. ”We are also taking various steps to strengthen the governance framework across our group entities (especially regulated entities) by appointing subject matter experts as advisors or independent directors, reviewing various processes etc. I am ensuring that we have greater regulatory engagement and have a higher focus on compliance, in letter and in spirit.”
These experts will provide valuable insights and guidance to ensure that Paytm’s governance practices are robust and in line with best industry standards. The company is also conducting independent validation to ensure transparency and fairness in its operations. This approach aims to create a compliance-first culture across all group entities, particularly those that are regulated.
Over the past months, Paytm has taken significant steps to bolster its governance framework, emphasizing its commitment to compliance, risk management, and regulatory engagement. To enhance the governance structure across its group entities, Paytm had formed a Group Advisory Committee chaired by a former SEBI chairman M Damodaran. This committee has been tasked with evaluating current governance practices and making recommendations to the board, which will decide on an implementation and validation plan for these recommendations.
Paytm’s commitment to enhancing its governance framework extends to its associate entity, Paytm Payments Bank Limited (PPBL). On March 1, 2024, Paytm and PPBL disclosed additional measures to strengthen PPBL’s independent operations. As part of this process, Paytm and PPBL have mutually agreed to discontinue various inter-company agreements with Paytm and its group entities. This move is designed to reduce dependencies and support PPBL’s governance, independent of its shareholders. The shareholders of PPBL have agreed to simplify the Shareholders Agreement (SHA) to further enhance PPBL’s governance framework.
Earlier, the board of One 97 Communications Ltd (Paytm) approved the termination of inter-company agreements and the amendment of the SHA. This strategic decision underscores Paytm’s dedication to ensuring robust governance and compliance across its operations.
These changes reflect the company’s unwavering commitment to growth, profitability, and maintaining the highest standards of governance and compliance. By investing in risk and compliance functions and ensuring greater regulatory engagement, Paytm continues to position itself as a leader in the financial services industry, dedicated to innovation and excellence.
Paytm had previously announced its intention to establish new partnerships with other banks to provide seamless services for its customers and merchants, maintaining the high standards of innovation and technology-enabled solutions that Paytm is known for.
It has partnered with – Axis Bank, HDFC Bank, State Bank of India (SBI), and Yes Bank and has started transitioning its UPI users to these banks. In February, the company partnered with Axis Bank for the nodal account and escrow account to continue seamless merchant settlements.
