India's Paytm Discontinues Inter-Company Agreements With Its Payments Bank

New Delhi: India's Paytm and its payments bank unit have mutually agreed to discontinue various inter-company agreements in the process to reduce dependencies, the embattled payments firm said on Friday. Paytm, formally known as One 97 Communications, did not specify what agreements were being terminated.

The payments bank agreed to simplify the shareholders' agreement to "support (Paytm Payments Bank's) governance, independent of its shareholders," the company said. (Also Read: RBI Revises Bill Payment Rules: Key Changes, Effective Date, All You Need To Know)

Paytm CEO Vijay Shekhar Sharma owns a 51 percent stake in Paytm Payments Bank while Paytm owns the rest. (Also Read: BIG Bonanza To Farmers Ahead Of Kharif Season! Centre Clears Rs 24,400 Crore Fertiliser Subsidy)

The move came days after Sharma stepped down as non-executive chairman and board member of the payments bank unit, as part of a major overhaul that follows a central bank clampdown.

The Reserve Bank of India had asked Paytm Payments Bank to wind down operations by March 15 due to persistent compliance issues and supervisory concerns, triggering a meltdown in Paytm's stock.

The action against the unit followed concerns including inadequate customer identity checks and a lack of arms-length distance from parent company Paytm, sources previously told Reuters.