Paytm could retrench many workers, company in big problem after RBI order

Financial services company Paytm may soon lay off workers. The company has said that it will reduce its non-core assets. In the fourth quarter of the last financial year, the revenue of One 97 Communications, which runs Paytm, declined by 2.6 percent for the first time since its listing. The company’s revenue was around $22.7 billion. Earlier this year, the Reserve Bank of India (RBI) had ordered the closure of its banking unit.

One 97 Communications’ net loss increased manifold to nearly $5.5 billion. The company’s stock has also fallen sharply in the last few months. Paytm Paytm was started in 2010 by entrepreneur Vijay Shekhar Sharma. The restrictions imposed by RBI have taken a toll on Paytm’s reputation. Due to this, Paytm’s customers may go to its rival PhonePe. The company said that it is in profit before interest, tax, depreciation and amortization as well as employee incentives. Along with this Paytm expressed apprehension that the revenue may fall to Rs 16 billion in the June quarter. The company said that its business may improve after this. It said that to make the company balanced, it will have to reduce employee cost as well as reduce non-core assets.

It competes with Amazon.com, Google and billionaire Mukesh Ambani’s Jio Financial Services. Paytm said it lost about 4 million monthly transacting users in the fourth quarter. It has given loans worth a little over Rs 57 billion. In the previous quarter, these loans were worth more than Rs 155 billion.

The Financial Intelligence Unit (FIU) had imposed a penalty of more than Rs 5 crore on Paytm Payments Bank (PPBL) in March. The reason for this was violations in reporting illegal money sent through PPBL accounts. The FIU, under the Finance Ministry, had investigated PPBL after receiving information from law enforcement agencies about some entities being involved in illegal activities including online gambling and sending the proceeds through the bank.