To prevent similar cases in the future, the roles of the government, shareholders, and boards in

other banks should involve enhanced oversight, transparency, and accountability measures.

1. Government:

Regulatory Framework: Strengthen and enforce regulatory frameworks governing

corporate governance, conflict of interest, and lending practices.

March 2023: The RBI barred Paytm Payments Bank from onboarding new
customers and mandated thorough audits of its IT systems due to "persistent non-
compliance with regulations and continued material supervisory concerns."

January 2024: Based on audit reports, the RBI further restricted Paytm Payments
Bank, prohibiting it from accepting fresh deposits or credit transactions after
February 29, 2024. Existing users could withdraw their funds but couldn't top up
wallets or accounts.

 Independent Audits: Ensure independent and thorough audits of banks, particularly

focusing on related-party transactions and potential conflicts of interest.

 Whistleblower Protection: Establish robust mechanisms to protect and encourage

whistleblowers, facilitating the reporting of any unethical or fraudulent practices.

 The Whistle Blowers Protection Act, 2014:

This law applies specifically to public servants and aims to prevent corruption,
misuse of power, and criminal offenses within the public sector.

2. Shareholders:

 Active Engagement: Encourage shareholders to actively engage in corporate

governance matters, including voting on key decisions and expressing concerns
about the management's conduct.

Transparent Communication: Demand transparent communication from the bank's

leadership regarding

3. Boards:

Should Strengthen risk management practices; Develop and enforce clear ethical guidelines;
and Conduct regular internal and external audits.