Indian digital funds agency Paytm plans to minimize shut to 20 p.c of employees at its banking unit amid uncertainty over the unit’s future due to a looming central financial institution deadline for it to halt most operations, two sources stated.
Paytm Payments Bank has determined to lay-off employees in sure divisions, together with operations, the sources with direct data of the matter stated.
The unit had 2,775 workers as of December 2023, information from info supplier Tracxn exhibits.
Paytm, formally generally known as One 97 Communications, owns a 49 p.c stake within the financial institution which was ordered by the Reserve Bank of India (RBI) on the finish of January to cease accepting credit score transactions or deposits throughout merchandise comparable to financial savings accounts, pay as you go playing cards and digital wallets by March 15, following persistent compliance breaches.
Paytm shares have misplaced 54 p.c of their worth because the regulatory clampdown, within the worst disaster for one of India’s largest digital cost corporations.
“Since this regulatory order has coincided with appraisal season, employees with low ratings have been asked to leave,” the primary supply, an worker on the banking unit, stated.
“Employees are frustrated because the management has gone back on their word that nobody will be laid off,” this particular person stated.
In an inner town-hall assembly in February, Paytm CEO Vijay Shekhar Sharma assured the financial institution’s employees there could be no layoffs, the second supply, additionally a banking unit worker, stated.
Neither supply wished to be recognized as they aren’t authorised to communicate to the media.
A spokesperson for Paytm Payments Bank declined to remark.
A Paytm spokesperson stated: “There are no layoffs here.” The annual appraisal cycle is underway on the firm which can lead to changes based mostly on efficiency evaluations and function suitability, this spokesperson added. “It’s crucial to understand that this process is distinct from layoffs”.
After Friday’s deadline, clients who’ve deposits within the financial institution’s accounts, wallets and toll tags for paying highways taxes, can nonetheless entry them. But no contemporary deposits may be made.
Paytm Payments Bank can even nonetheless maintain a regulatory licence until it’s withdrawn by the RBI.
It is unclear what goal Paytm Payments Bank will serve after the enterprise halt, the second supply stated.
Both sources stated there had been no replace from Paytm on what banking employees would do after the transfer.
Paytm has absorbed about 100 workers from the banking unit, the second supply stated.
Paytm, which has been utilizing its banking unit to again digital funds via its personal app, is anticipating to get a licence this week from the National Payments Corp of India (NPCI) that might enable its clients to proceed utilizing the Paytm app for funds via the nation’s in style unified cost interface (UPI).
© Thomson Reuters 2024
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