Paytm and its payments bank unit have mutually agreed to discontinue various inter-company agreements in the process to reduce dependencies, the embattled payments firm said on Friday.

Paytm, formally known as One 97 Communications, did not specify what agreements were being terminated.

The payments bank agreed to simplify the shareholders' agreement to "support (Paytm Payments Bank's) governance, independent of its shareholders," the company said.

Paytm CEO Vijay Shekhar Sharma owns a 51% stake in Paytm Payments Bank while Paytm owns the rest.

The move came days after Mr Sharma stepped down as non-executive chairman and board member of the payments bank unit, as part of a substantial revamp following a central bank crackdown.

The Reserve Bank of India had directed Paytm Payments Bank to cease operations by March 15 due to ongoing compliance challenges and regulatory concerns, triggering a decline in Paytm stock.