Indian digital payments company Paytm Payments Bank plans to reduce its banking workforce by nearly 20 percent as the central bank’s deadline to suspend most operations approaches and the sector’s future remains uncertain, two people said.
According to sources, payments bank Paytm has decided to cut staff in certain departments, including operations.
According to information provider Tracxn, the sector employed 2,775 people as of December 2023.
Paytm (formerly known as One 97 Communications), which holds a 49% stake in the bank, secured a credit agreement with the Reserve Bank of India (RBI) for products such as savings accounts and debit cards in late January and received an upfront payment and received the order to stop it. Accepting Deposits Due to continued non-compliance, we will be suspending our digital wallet by March 15th.
In the worst crisis facing one of India’s largest digital payments companies, Paytm shares have lost 54 percent of their value since regulations were tightened.
The first source, a banking sector official, said: “As the supervisory order coincided with the assessment period, lower-ranking employees were asked to resign.”
“Employees are unhappy because management broke its promise not to fire anyone,” the person said.
A second source, also a banking sector official, said Paytm CEO Vijay Shekhar Sharma had insisted at an internal town hall meeting in February that he would not lay off employees.
Neither source wanted to be named because they are not authorized to speak to the media.
A spokesperson for Paytm Payments Bank declined to comment.
“There are no layoffs here,” a Paytm spokesperson said. The company spokesperson added: The company has an annual review cycle and adjustments may be made based on performance reviews and suitability for the role. It is important to understand that this process is different than a layoff.
After Friday’s deadline, customers who have deposits, wallets and toll stickers in their bank accounts to pay highway taxes will still have access to them. However, new deposits are not possible.
Paytm Payments Bank will continue to retain its regulatory license unless revoked by the RBI.
It is not clear what the Paytm Payments bank will achieve after the closure, the second person said.
Both sources said they have not received any information from Paytm about what will happen to the bank’s employees after the transfer.
Paytm has recruited about 100 employees from the banking sector, the second person said.
Paytm, which has forayed into the banking sector to enable digital payments through its apps, will this week get permission from the National Payments Corporation of India (NPCI) to continue allowing customers to make payments through the Paytm app. It is planned. Therefore, the Unified Payment Interface (UPI) is widely used in the country.
