One 97 Communications Limited (Paytm) has approved a default loss guarantee structure of up to Rs. 90 crore each for Muthoot Fincorp and Kisetsu Saison Finance to support its loan distribution business. Additionally, Independent Director Ashit Ranjit Lilani will conclude his board term on July 4, 2026.
NOIDA, India — One 97 Communications Limited, the parent entity operating under the brand name Paytm, has formally approved a financial risk-mitigation framework to provide a Default Loss Guarantee (DLG) of up to Rs. 90 crore (900 million rupees) to each of its primary institutional lending partners. Disclosed in an official regulatory filing on June 4, 2026, the digital payments provider has established these protective arrangements with Muthoot Fincorp Limited and Kisetsu Saison Finance (India) Private Limited. The decision aligns directly with India's evolving financial guidelines, which permit fintech distributors to back their credit sourcing portfolios with corporate indemnity pools.
Alongside the credit guarantee approval, Paytm announced a major change in its corporate governance structure. Non-Executive Independent Director Ashit Ranjit Lilani has officially withdrawn his consent for a proposed five-year re-appointment, meaning his tenure will conclude in July 2026.
Securing Loan Distribution with Corporate Guarantees
The newly authorized default loss guarantee framework is engineered to strengthen Paytm’s existing credit syndication and loan distribution business model. Operating as a marketplace intermediary, the technology platform generates corporate revenue by earning sourcing and collection fees from commercial financial institutions that disburse credit directly to authenticated digital consumers.
Under the specific terms approved by the executive committee, the platform will extend a default loss guarantee of up to Rs. 90 crore net of invocations individually to Muthoot Fincorp Limited and Kisetsu Saison Finance (India) Private Limited. To satisfy strict underwriting regulations, the company will secure these credit guarantees through either cash backed Fixed Deposits (FDs) or formal institutional Bank Guarantees.
Management confirmed that the resulting financial guarantee expenses, which are projected to reach up to Rs. 90 crore per partner over an extended timeline, fit safely within its standard operating budgets. Because the platform is professionally managed and features no identified promoter group, the agreement was executed transparently at arm's length without any conflicting internal party interests.
Independent Director Steps Down After Board Consent Withdrawal
In a parallel corporate governance disclosure, the company revealed a shift in its senior leadership structure. Ashit Ranjit Lilani, who had previously been considered for a second consecutive five-year term as a Non-Executive Independent Director starting July 5, 2026, officially withdrew his candidacy on June 3, 2026.
In a formal letter sent to the board, Mr. Lilani explained that his decision was driven entirely by new professional commitments accepted after the board's initial approval on May 6, 2026. He explicitly confirmed that his departure was not caused by any underlying material disagreements with the firm's administrative policies.
As a direct result of this withdrawal, Mr. Lilani's current term will wrap up at the close of business hours on July 4, 2026. This transition will require the company to restructure several internal oversight committees. Upon his departure, Mr. Lilani will step down as the chairperson of the Nomination and Remuneration Committee and the Stakeholders' Relationship Committee, while also vacating his seats on the Audit and Investment Committees.
The board formally acknowledged the resignation through a circular resolution passed on June 4, 2026, placing on record its deep appreciation for his guidance during his five years of service.
Official Sources Section
The financial parameters, institutional partner identities, credit guarantee instruments, and board transition timelines detailed in this report are based strictly on the official corporate compliance disclosure filed by One 97 Communications Limited with BSE Limited and the National Stock Exchange of India Limited under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Quote Section
"In line with the Company's existing loan distribution business and in line with the applicable regulatory framework, the Company has on June 04, 2026, approved to provide Default Loss Guarantee of up to 90 crore with each of the lending partners," stated Sunil Kumar Bansal, Company Secretary and Compliance Officer of One 97 Communications Limited, in the official stock exchange filing. "The Company intends to provide Default Loss Guarantee net of invocations on loans disbursed by them, from time to time, provided in the form of Fixed Deposits or Bank Guarantee."
Why It Matters
The introduction of these localized corporate default loss guarantee pools has clear practical implications for India's digital credit ecosystem:
For Retail Consumers: The financial backing lowers the risk for lenders, which could expand credit access and speed up loan approvals for everyday platform users.
For Lending Partners: Securing an institutional default loss guarantee limits credit loss exposure, allowing non-banking financial companies (NBFCs) to safely scale their digital loan portfolios.
For Public Investors: The risk-sharing model adds a predictable financial expense of up to Rs. 90 crore per partner, but it gives the company a tool to grow its core high-margin loan sourcing revenues.
Key Facts at a Glance
Financial Commitment: Paytm has authorized a default loss guarantee framework of up to Rs. 90 crore (900 million rupees) for each of its partners.
Primary Lending Partners: The initial risk-sharing structures are established with Muthoot Fincorp Limited and Kisetsu Saison Finance.
Backing Mechanism: The corporate credit guarantees will be fully secured using institutional Bank Guarantees or cash Fixed Deposits.
Governance Transition: Independent Director Ashit Ranjit Lilani has withdrawn his consent for re-appointment due to other business commitments.
Departure Date: Mr. Lilani will officially step down from all board committees at the close of business hours on July 4, 2026.
Frequently Asked Questions
What is a Default Loss Guarantee (DLG) in fintech distribution?
A DLG is a contractual arrangement where a technology platform compensates an institutional lender up to a set percentage if a borrower defaults on a loan sourced through the platform.
Will this decision increase Paytm's financial risk exposure?
While the arrangement introduces a potential cost of up to Rs. 90 crore per partner over time, it lowers the risk for the lending partners, encouraging them to disburse more loans and drive higher sourcing fees for the platform.
Why did Independent Director Ashit Ranjit Lilani leave the board?
Mr. Lilani withdrew his consent for a second term purely due to new professional commitments taken on after the initial board review, confirming there were no material disputes behind his decision.
Source: Official regulatory filing and annexure updates submitted to BSE Limited and the National Stock Exchange of India Limited by One 97 Communications Limited on June 4, 2026.
