The well-known Paytm app's parent business, One 97 Communications Limited, and Paytm Payments Bank have a separate and independent relationship, according to the company's management, led by Vijay Shekhar Sharma. They argue that this divide is the outcome of design and structure because the two organizations operate independently and adhere to banking governance requirements.

On the other hand, Vijay Shekhar Sharma holds a part-time position as Chairman of Paytm Payments Bank. In addition to serving as a director on the bank's board, Bhavesh Gupta is the CEO of Paytm's lending and offline payment division. Likewise, Srinivas Yanamandra, the Group Head of Regulatory Affairs & Policy at the parent firm, is a director of the bank. Yanamandra was the director of the New Development Bank's compliance division, located in Shanghai.

During a Paytm investor call, Madhur Deora, CFO & Additional Whole Time Director, said: "It's a tricky situation because one of your associates needs to make independent judgements. Furthermore, if the regulator determines that their decisions and activities were insufficient or deficient, it will undoubtedly hurt anyone's reputation."

Deora continued, "A bank must, above all, fulfil the governance standards that are expected of it. Given that the connected firm is a bank operating in a highly regulated industry, it is not an associate business in the classic sense. Deora contended that an independent management team reporting to the Board is required to address matters that must be brought before the Board's committees, in which only independent directors may participate."

Deora is highlighting the involvement of the bank's independent directors in committees within the board. Committees including bank audit and risk management are led by independent directors. The bank has been the subject of an investigation by the Reserve Bank of India due to "persistent non-compliances and ongoing supervisory concerns."

One97 Communications Ltd has 49% of the shares in Paytm Payments Bank, which is considered an affiliate business of the parent firm, with Sharma owning the remaining 51% of the business. Under its differentiated licencing, the RBI permits payment banks to accept current and savings deposits and to offer payment products; lending is not allowed. There are important business ties between the two organisations.

Do the independent directors have the only responsibility for the Paytm Payments Bank scandal?

Five independent directors make up the bank's nine-member board of directors. Within the public sector, there are two bankers. Arvind Kumar Jain worked as an Executive Director at Punjab & Sind Bank before this. At the State Bank of India, the largest bank in the country, Manju Agarwal held the position of Deputy Managing Director. Two consultants, Pankaj Vaish, who has nearly thirty years of experience with Accenture, and Shinjini Kumar, a former PWC employee who has worked for Citibank, Bank of America Merrill Lynch, and the Reserve Bank of India. The sixth independent director is Ramesh Abhishek, a senior bureaucrat. Surinder Chawla, the MD and CEO, has extensive expertise having worked at RBL Bank, ABN Amro, Standard Chartered, and HDFC Bank.

In actuality, there have been multiple leadership changes at the bank. Satish Kumar Gupta joined the bank in October 2018 and left in October 2022. In July 2018, Gupta became CEO following the resignation of Renu Satti. Shinjini Kumar, who is now an independent director, served as CEO before that.