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

Paytm, which is associated with payment services, has planned to lay off about 20 percent of the workers in its banking unit. The Reserve Bank of India (RBI) has ordered Paytm Payments Bank to cease operations from March 15. For this reason it has been decided to make layoffs from this unit.

This layoff will be done in some divisions including operations. Reuters report quoted sources with knowledge of the matter as saying, “Because of this order, workers with low ratings for appraisal have been asked to resign. There is disappointment among the workers because the management is not laying off anyone.” Has gone back on his promise to do so.” There were about 2,775 workers in Paytm Payments Bank in December last year. One 97 Communications, which runs Paytm, has about 49 percent stake in Paytm Payments Bank. After the RBI order to close this unit, Paytm's shares have fallen by about 54 percent.

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

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