Does Paytm Payments Bank cut about 20% of staff as a business halt looms?

According to two sources, the digital payments company Paytm intends to reduce about 20% of its workforce at its banking division due to concerns about the unit's viability given an impending deadline from the central bank to cease its operations. Employees in several departments, including operations, will be let go by Paytm Payments Bank, according to people with firsthand knowledge of the situation.

Because the bank had been in chronic violation of compliance, the Reserve Bank of India (RBI) ordered it to stop accepting credit transactions or deposits for products including savings accounts, prepaid cards, and digital wallets by March 15. Paytm, then known as One 97 Communications, controlled 49% of the bank. The biggest crisis for one of the largest digital payment companies in India, Paytm, has seen a 54% decline in share value since the regulatory onslaught. An employee of a banking unit made the initial accusation that "since this regulatory order has coincided with appraisal season, employees with low ratings have been asked to leave."

"Employees are frustrated because the management has gone back on their word that nobody will be laid off," stated this individual.The second source, a banking unit employee, claimed that Paytm CEO Vijay Shekhar Sharma promised the bank's employees there would be no layoffs during an internal town hall meeting in February. Since they are not authorized to speak with the media, neither source wanted to be named.

Paytm Payments Bank declined to comment through a representative. According to a Paytm representative, "There are no layoffs here." The organisation is currently in the midst of its yearly appraisal cycle, which could result in changes depending on role fit and performance reviews, the representative continued. "It's crucial to understand that this process is distinct from layoffs.".

 

Customers can still access their wallets, toll tags for paying highway fees, and bank accounts beyond Friday's deadline. However, no new deposits are accepted. In addition, Paytm Payments Bank will continue to be licensed unless the RBI withdraws it.The second source stated that it is unclear what function Paytm Payments Bank will have following the closure of operations. According to both sources, Paytm has not provided an update on what the banking personnel would do following the transfer.

According to the second source, Paytm has hired roughly 100 people from the banking division. Paytm anticipates receiving a licence this week from the National Payments Corp. of India (NPCI), which would permit its users to keep using the Paytm app for payments through the nation's well-known unified payment interface (UPI). Paytm has been using its banking unit to support digital payments through its own app.