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HomeBusinessPaytm Payments Bank faces staff reduction; 20% workforce to be impacted: Report

Paytm Payments Bank faces staff reduction; 20% workforce to be impacted: Report

Paytm Payments Bank layoffs

: Digital payments platform Paytm Payments Bank is set to reduce its workforce by approximately 20% as it navigates uncertainties surrounding its future operations. The move comes in response to a looming deadline imposed by the

Reserve Bank of India

(RBI) for the bank to cease most of its activities.
According to a Reuters report, Paytm Payments Bank has initiated

staff layoffs

across various divisions, including operations.

As of December 2023, the bank employed 2,775 individuals, as per data from Tracxn, an information provider.
Paytm, known as One 97 Communications, owns 49% of the bank. The RBI directed the bank in late January to cease accepting credit transactions or deposits in savings accounts, prepaid cards, and digital wallets by March 15 due to ongoing

compliance issues

. Since then, Paytm shares have witnessed a significant decline, losing 54% of their value.
An employee from the banking unit told Reuters that due to the timing of the regulatory order during the appraisal season, those with low ratings are being let go.

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They expressed frustration because management had initially promised no layoffs. Another banking unit employee confirmed that during a February town-hall meeting, Paytm CEO Vijay Shekhar Sharma assured staff there would be no job cuts.
Both sources preferred to be anonymous as they lacked authorisation to speak to the media.
While Paytm Payments Bank declined to comment on the staff reductions, a spokesperson from Paytm said, “There are no layoffs here”. The spokesperson clarified that the ongoing annual appraisal cycle might result in adjustments based on performance evaluations and role suitability. The spokesperson said that this process differs from layoffs.

Following the deadline on Friday, customers with existing deposits in the bank’s accounts, wallets, and toll tags for highway taxes can still access them. However, the bank will not accept any new deposits.
Paytm Payments Bank

will retain its regulatory license unless revoked by the RBI.
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The second source expressed uncertainty about the future role of Paytm Payments Bank. Both sources noted a lack of communication from Paytm regarding the next steps for banking staff.
According to the second source, Paytm has moved approximately 100 employees from the banking unit.

regulatory challenges

, Paytm aims to continue its

digital payment services

through its app. The company expects to obtain a license from the National Payments Corp of India (NPCI) that would enable customers to use the Paytm app for payments via the unified payment interface (UPI).