PBBL Board Reconstitution

 PBBL Board Reconstituted: Interesting Questions to answer

Paytm Payment Bank Ltd (PBBL) reconstituted its board with two ex-bankers, who held very high positions in PSBs and two ex-IAS officers joining as independent directors. All of them along with the existing CEO explained that the goal is to make PBBL a paragon of regulatory compliance and fostering a culture of best practices. OCL also withdrew its nominee and its founder promoter also resigned from his position as part-time Chairman of PBBL.

What is surprising is the timing of the rejig. Please see the following sequence of events

1. RBI has prohibited credits in customers accounts/PPIs/wallets etc of PBBL after 15th March 2024.

2. RBI Governor indicated that there is hardly any chance for the regulator to review its decision on the restrictions imposed on PBBL

3. RBI advised NPCI to examine the request of OCL application of TPAP with a rider that the UPI handle of paytm be migrated from PBBL to a set of 4-5 banks for acting as payment service providers

In this regard, already the compliance issues flagged by RBI are being handled by the management of PBBL. The above sequence of events indicate that PBBL do not accept fresh deposits from existing/new cusomers and its ability to act as a banker to handle digital payments of paytm is being shifted to other banks. So revival chances of PBBL as a payment banker look bleak at present.

In the above background, reconstitution of the board by PBBL at this point of time, by inducting experienced bankers and bureaucrats, naturally raise two questions.

1. Whether it is an attempt to hold the market share value of OCL  at least at present level or

2. Whether the reconstitued board will be drafted into discussions with other payment bankers for a takeover of PBBL, that might be contemplated, when the regulatory/compliance issues comes to an end.

I rest my case.

Regards

V. Viswanathan

27th February 2024.


Comments

  1. SridharFebruary 27, 2024 at 5:45 AM

    It is possible that the board has been reconstituted on the advice of RBI. Otherwise, the two former CEOs banks would not have readily agreed

    ReplyDelete
    Replies
    1. AnonymousMarch 11, 2024 at 10:59 PM

      Yes. But should they state their mission starements immediately?

      Delete

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