One 97 Communications Ltd (OCL), the Paytm parent, announced the formation of “Group Advisory Committee” chaired by former Sebi chairman M. Damodaran on Friday. The three-member panel will work with the board on compliance and regulatory matters.

The step comes after the January 31 action by the RBI where it directed Paytm Payments Bank Ltd (PPBL) that no fresh deposits, credit transactions or top ups will be allowed in any customer accounts, prepaid instruments, wallets, FASTags after February 29.

On Thursday, Reserve Bank of India deputy-governor Swaminathan J. said the supervisory action came on account of persistent non-compliance by the bank.

OCL disclosed in a regulatory filing that the other members of the committee are M.M. Chitale, former president of the Institute of Chartered Accountants of India (ICAI) and a former governing council member of the Banking Codes and Standards Board of India.

The committee has R.Ramachandran, former chairman and managing director of Andhra Bank.

While the panel will work closely with the board, it could induct additional members, as necessary. Damodaran will serve as the chairperson of the committee.

Paytm said the appointment of the committee is part of its effort to drive sustainable business growth, while adhering to a regulatory and compliance framework.

The announcement came on a day the Employees’ Provident Fund Organisation (EPFO) imposed restrictions on deposit and credit transactions for EPF holders who have their accounts linked to PPBL.

In a circular, the EPFO while referring to the restrictions imposed by the RBI, said “all the field offices are advised to refrain from accepting claims associated with bank accounts in Paytm Payments Bank with effect from February 23, 2024’’.

This would mean that customers who have linked their PPBL account to the EPFO will now have to add another bank account from where the claims can be made.

While it is not clear as to how much EPFO subscribers are PPBL account holders, they will now have to go to the organisation’s website to make the necessary changes and seek the employers verification after which the bank account will be updated.

In November last year, the EPFO had allowed Paytm Payments Bank to settle claims.