Paytm founder Vijay Shekhar Sharma expressed optimism that his digital payments venture will overcome regulatory challenges in India this year and make a resilient comeback as a stronger company.
"The key lesson I've learned is that sometimes your team and advisors may not have the correct understanding. It's crucial for you to take charge of the situation rather than relying solely on teammates or advisors to guide you," remarked Sharma at a financial technology conference in Tokyo on Tuesday. This marks his first public appearance since Indian regulators instructed his banking affiliate to cease certain activities.
In his effort to restore stability to his digital payments company, Vijay Shekhar Sharma is contending with stringent restrictions imposed by regulators on the banking affiliate, which serves as the backbone for a significant portion of Paytm's financial and payment services.
While both Paytm and Paytm Payments Bank are integral parts of Sharma's fintech empire, the bank is not under the direct control of the publicly traded mobile wallet pioneer.
In February, Vijay Shekhar Sharma stepped down from the board of Paytm Payments Bank, shortly after the banking regulator in India prohibited the bank from accepting new deposits in its customer accounts or wallets.
The regulatory constraints were imposed due to concerns over the flow of money and data traffic between the tightly regulated bank and the broader Paytm ecosystem, leading to accounting and supervisory issues.
Despite the challenges, Sharma expressed appreciation for the regulatory role in fostering a healthy environment for startups in India.
“Things become very big and systematically important, very fast,” Sharma said. “We have been able to very happily see our regulator engage.”
Paytm's shares, traded under One97 Communications Ltd., experienced a significant decline of around 45% following the regulatory restrictions on the bank imposed on January 31. However, the shares have since rebounded from their lows after Paytm entered into a partnership with Axis Bank Ltd.
The collaboration involves Axis Bank taking over certain tasks previously managed by Paytm Payments Bank. Paytm is actively seeking additional banking partners as it works to overcome the regulatory challenges.
Sharma envisions Asia seizing the opportunity to create a financial system tailored for the next generation. Despite recent regulatory setbacks, Sharma is determined to position Paytm as a leader in Asia.
“Asia has an opportunity to build a financial system for the next generation,” Sharma said. “Make Paytm an Asia leader — in my lifetime, I would like to do that.”
Currently, he owns a 51% stake in Paytm Payments Bank, with the remaining share held by Paytm. Following regulatory actions, the bank restructured its board, appointing four new directors. While Sharma resigned from the Paytm Payments Bank board, he remains at the helm of Paytm, a company he founded and has led for over a decade.