Paytm Payments Bank CEO Surinder Chawla quits to explore better career prospects

Surinder Chawla, the Managing Director and CEO of Paytm Payments Bank (PPBL), has announced his resignation.

The resignation comes in the wake of considerable regulatory scrutiny from the Reserve Bank of India (RBI) that has cast a shadow over the bank's operations.

In an exchange filing, Paytm said Chawla's resignation is effective from June 26, 2024. He cites personal reasons and the pursuit of better career prospects as the reasons behind his decision.

Who is Surinder Chawla?

Surinder Chawla has over 30 years of experience in the banking industry. He first joined Citi Bank in 1992 as an Industrial Trainee, later moving to Standard Chartered Bank and ABN AMRO Bank N.V. He also held leadership roles at HDFC Bank and RBL Bank.

In February 2023, Paytm Payments Bank appointed Chawla as MD and CEO, an appointment that was approved by the Reserve Bank of India for a period of three years.

Regulatory hurdles

PPBL has been under the RBI's lens, facing actions that include stopping the bank from accepting new deposits and onboarding new customers. These measures were a response to what the RBI termed as "persistent non-compliance" and "material supervisory concerns."

It's notable that these restrictions were implemented shortly after Chawla took the helm, following the bank's receipt of necessary approvals from the RBI.

Leadership and board restructuring

In response to these challenges, PPBL's leadership and governance structures have been broader overhauled. Paytm founder Vijay Shekhar Sharma stepped down as the part-time non-executive Chairman. 

Subsequently, the board was reconstituted, introducing five independent directors and an independent chairperson, aiming to address regulatory concerns and steer the bank towards compliance and recovery.

Termination of service agreements with PPBL 

Following the RBI's crackdown, One97 Communications distanced itself from PPBL and terminated nearly all agreements between the two entities.

"As informed earlier, nearly all agreements between the Company and PPBL have been terminated as per our disclosure on March 1, 2024, and the board of PPBL has been reconstituted with five independent directors, including an Independent Chairperson, and no nominees from the Company, as per our disclosure on February 26, 2024," the company earlier informed.

The company has also received approval to operate as a Third-Party Application Provider (TPAP) under the multi-bank model for UPI, indicating a pivot in its business strategy amidst the ongoing regulatory challenges.