Surinder Chawla, the Managing Director and CEO of Paytm Payments Bank (PPBL), has tendered his resignation, as disclosed in a regulatory filing by One97 Communications, the brand owner of Paytm. The resignation will be effective from June 16, 2024, marking the departure of Chawla amidst regulatory challenges faced by PPBL from the Reserve Bank of India (RBI).

Chawla cited personal reasons for his resignation in his letter to the company. He had assumed the role of MD and CEO of PPBL in January of the previous year. One97 Communications confirmed the resignation, stating that nearly all agreements between the company and Paytm Payments Bank had been terminated, as previously disclosed on March 1, 2024.

The PPBL board has also undergone reconstitution with five independent directors and an independent chairperson, following disclosures made on February 26, 2024.

The company emphasised its ongoing efforts to collaborate with banking partners to enhance merchant acquiring and UPI services. Vijay Shekhar Sharma had earlier resigned from the PPBL board on February 26, part of a broader board overhaul following regulatory scrutiny from the RBI.

The regulatory challenges for PPBL began when the RBI directed the bank to wind down its operations by March 15, 2024, due to compliance issues and supervisory concerns. This directive included a ban on accepting fresh deposits and conducting credit transactions after February 29, with a subsequent extension of the deadline to March 15.

Despite these challenges, on March 14, the National Payments Corporation of India (NPCI) approved One97 Communications to participate in UPI services as a third-party application provider under a multi-bank model. Paytm has since collaborated with four new banks — Axis Bank, HDFC Bank, State Bank of India, and Yes Bank — to provide payment services.

The impact of these regulatory actions has been reflected in Paytm's stock performance, with shares down nearly 50% since the RBI's directive against its banking unit. On April 9, One97 Communications' shares settled 1.95% lower at ₹404.30 apiece on the BSE.