Paytm Payments Bank to Cut About 20 Percent of Staff due to shutdown Order by RBI

Payment services company Paytm has planned to lay off about 20 percent of its workers from its banking unit. Reserve Bank of India (RBI) has ordered Paytm Payments Bank to stop operations from March 15. Due to this, it has been decided to lay off workers from this unit.

These layoffs will be done in some divisions including operations. According to Reuters Report In a report citing sources familiar with the matter, it was reported that “As a result of this order, workers with low ratings for appraisal have been asked to resign. There is disappointment among the workers as the management has reneged on its promise of not laying off anyone.” In December last year, Paytm Payments Bank had around 2,775 workers. Paytm One 97 Communications, which runs Paytm Payments Bank, has a 49 percent stake in the bank. After RBI’s order to shut down this unit, Paytm’s stock has fallen by about 54 percent.

Paytm CEO Vijay Shekhar Sharma had assured the unit’s staff in a townhall meeting held last month that there would be no layoffs. Earlier this month, the Financial Intelligence Unit (FIU) imposed a penalty of over Rs 5 crore on Paytm Payments Bank for violations in reporting illegal money transferred through Paytm Payments Bank accounts.

FIU, under the Finance Ministry, had investigated Paytm Payments Bank 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. Regarding this, the Finance Ministry had said in a statement, “The proceeds from illegal activities were sent by these entities through their accounts in Paytm Payments Bank.” The FIU order said that Paytm Payments Bank did not report the suspicious transactions and due diligence of these accounts was not done. Earlier, Paytm had said that it had received notices from some authorities, including the Enforcement Directorate, to provide information and clarification.