Paytm Payments Bank likely to lay off employees amid uncertainty after RBI restrictions: Report
Mumbai: Paytm Payments Bank Limited (PPBL) may cut down its workforce by around 20 percent due to uncertainty about the bank's future, Reuters reported.
The sources indicate that the company's move to downsize its staff at the payments bank is related to the Reserve Bank of India's (RBI) directive to halt several crucial operations by March 15 due to ongoing compliance issues.
The bank plans to hand off pink slips to employees in several departments, including operations, said the sources quoted in the report.
The bank employed 2,775 employees as of December 2023.
"Since this regulatory order has coincided with the appraisal season, employees with low ratings have been asked to leave," the first source, an employee at the banking unit, told the news agency. "Employees are frustrated because the management has gone back on their word that nobody will be laid off," added the person.
In an internal town hall meeting in February, Paytm CEO Vijay Shekhar Sharma reportedly reassured the bank's employees that there would be no layoffs, as per the second source, who is also an employee in the banking unit.
However, a spokesperson from Paytm refuted the claim, stating that there are no plans for any job cuts as a result of the RBI's actions against the payments bank.
"There are no layoffs here. The annual appraisal cycle is underway at the company which may lead to adjustments based on performance evaluations and role suitability," said the spokesperson.
"It's crucial to understand that this process is distinct from layoffs," the spokesperson added.
Following the March 15 deadline, customers will retain access to their deposits and wallets held by Paytm Payments Bank, although the bank will no longer accept new deposits.
The bank's future remains uncertain after the cessation of its operations.
Despite these challenges, Paytm expects to receive a license from the National Payments Corporation of India (NPCI), enabling its customers to continue using the Paytm app for payments via the unified payment interface (UPI).
However, there hasn't been any communication from Paytm regarding the future roles of banking staff after the operational halt.
Reportedly, the company has absorbed approximately 100 employees from the banking unit.
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