Staff reductions at Paytm Payments Bank would affect 20% of the workforce: Report

Paytm Payments Bank layoffs: In order to manage the uncertainty around its future operations, digital payments company Paytm Payments Bank plans to cut 20% of its workers. The Reserve Bank of India (RBI) has set a deadline for the bank to stop most of its operations, which is why the action was taken.
A Reuters article claims that Paytm Payments Bank has started to lay off employees in a number of departments, including operations.

2,775 people were employed by the bank as of December 2023, according to figures from information source Tracxn.
49 percent of the bank is owned by Paytm, formerly One 97 Communications. Because of continuous compliance problems, the RBI ordered the bank in late January to stop taking credit transactions or deposits in savings accounts, prepaid cards, and digital wallets by March 15. Since then, the value of Paytm’s shares has significantly decreased, falling by 54%.
A banking unit employee told Reuters that people with bad ratings are being let off since the regulatory directive was issued during the evaluation season.

They were upset because, at first, management had said there would be no layoffs. An additional banking unit worker attested to the fact that Paytm CEO Vijay Shekhar Sharma promised employees there would be no layoffs at a town hall meeting in February.
Since neither source had permission to communicate with the media, they both wished to remain nameless.
Although Paytm Payments Bank would not respond to inquiries over the employee cutbacks, a Paytm representative said, “There are no layoffs here.” The representative expounded that modifications to the current yearly assessment process might be made in light of performance reviews and position appropriateness. According to the spokeswoman, this procedure is not the same as layoffs.
Customers who have funds in their bank accounts, wallets, or toll tags for highway taxes may still access them beyond Friday’s deadline. But the bank isn’t taking any further deposits.
Until the RBI revokes it, Paytm Payments Bank will continue to have its regulatory license.

Regarding Paytm Payments Bank’s future role, the second source was unsure. According to both sources, Paytm has not been in contact with banking officials about its future actions.
The second source is that Paytm has let go of around 100 workers from the banking division.
Paytm intends to continue providing its app-based digital payment services in spite of regulatory obstacles. In order to allow users to utilize the Paytm app for payments via the universal payment interface (UPI), the business hopes to get a license from the National Payments Corporationoration of India (NPCI).