Embattled Indian FinTech Paytm has just undergone a leadership shakeup.
Bhavesh Gupta, the company’s president and chief operating officer, is stepping down from that role for personal reasons, parent firm One97 Communications said in a regulatory filing Saturday (May 4).
In addition, the company has appointed Rakesh Singh as the new chief executive of its wealth subsidiary, Paytm Money. The executive who held that position, Varun Sridhar, is becoming the new CEO of Paytm Services, Paytm’s wealth management arm.
“As we aim to scale and position ourselves among the top brokers in India, our focus will be on ramping up acquisition and delivering stable, innovative products at a low-cost, transparent price,” Singh said in a statement included with the filing.
“Focusing on growing an already profitable operation with full compliance to SEBI regulations will be a top priority.”
According to Paytm, Gupta will shift into an advisory role and offer guidance for the company’s growth plans for the rest of the year.
“The leadership will focus on profitable business expansion and is committed to regulatory compliance,” the filing said.
Regulatory compliance has been top of mind for Paytm this year after India’s central bank in late January suspended business at Paytm Payments Bank, the company’s banking affiliate.
The suspension came after an audit by the Reserve Bank of India (RBI) uncovered “persistent noncompliances and continued material supervisory concerns.”
A report by Bloomberg News days later — citing sources familiar with the matter, said the RBI audit uncovered money and data traffic flow between Paytm Payments Bank and Paytm, leading to accounting and supervisory problems.
The sources said the RBI had warned Paytm about these issues but they were not addressed. In addition, the regulator was also worried about an overlap in management at the bank and the rest of Paytm, with the same executives making decisions on behalf of both organizations, sparking potential conflicts of interest.
One month later, Paytm announced that it would be cutting back on its business ties with Paytm Payments Bank.
The company said in a National Stock Exchange of India filing that its board had “approved the discontinuation of various inter-company agreements with its associate entity, Paytm Payments Bank Limited.”
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