Layoff fears at Paytm as deadline for bank cutback just a day away

In Dec, Business Standard reported that Paytm was rationalising its employee cost structure, which includes revising its hiring strategy, focusing on contract employees

With the deadline closing in before multiple restrictions on Paytm Payments Bank take effect, job cuts are in the air. One97 Communications, Paytm’s parent  company, which is in the midst of an annual appraisal cycle, could consider reducing a part of its workforce, according to sources. 

A Paytm spokesperson denied any layoff move, stating: “We continue to transform our operations with artificial intelligence- (AI)-powered automation to drive efficiency. This involves redefining certain roles and tasks to better align with our growth and cost-efficiency goals”.
 

“We are in the midst of our annual appraisal cycle, a common practice across companies, where performance assessments may lead to adjustments based on performance evaluations and role suitability. It’s crucial to understand that this process is distinct from layoffs, a routine aspect of performance evaluations in any organisation,” the spokesperson said.

In December, Business Standard reported that Paytm was rationalising its employee cost structure, which includes revising its hiring strategy, focusing on contract employees, and a stricter performance appraisal. 
 

Last month, the Reserve Bank of India (RBI) issued directives restricting credit and debit transactions for the bank's customers starting March 15 due to lapses in due diligence.

The BSE cautioned investors about the impact of restrictions on Paytm Payments Bank on securities market transactions, advising them to review their banking arrangements and add additional accounts with other banks.

“In view of the same, investors are advised to review their current banking arrangements and add additional bank accounts with other banks to avoid any impact on transactions on account of the aforementioned RBI directive,” the BSE said in the advisory. 

Customers with a FASTag issued by Paytm Payments Bank can continue to use the same up to available balance.  They will have to procure a FASTag issued by another bank to continue to transact on toll plazas since no further funding or top-ups is allowed in FASTags issued by Paytm Payments Bank.  

Meanwhile, the National Highways Authority of India (NHAI) has advised people availing Paytm FASTag to switch to another bank before Friday to avoid the possibility of penalties at toll plazas.

Merchants using a Paytm QR code, Paytm soundbox or Paytm Point-of-Sale (POS) terminal that is linked to a bank account other than Paytm Payments Bank can continue to use the arrangement even after March 15. 

However, those merchants using a Paytm QR code, soundbox, or a POS terminal linked to a bank account or wallet with Paytm Payments Bank, may have to obtain a fresh QR code linked to an account with another bank or wallet to receive payment to avoid inconvenience. 

Along similar lines, the RBI last month said Paytm’s Unified Payments Interface (UPI) handle, @paytm, would be smoothly migrated from Paytm Payments Bank to a set of newly identified banks to minimise disruptions after March 15.

The banking regulator had advised the National Payments Corporation of India to consider the request of One97 Communications to become a Third-Party Application Provider (TPAP) for continued UPI operation of the app.

The TPAP licence will allow customers to continue using the Paytm app for payments through UPI as its payments bank faces restrictions. 


BSE, NHAI issue advisories

BSE issues advisory to investors
 

Says restrictions on Paytm Payments Bank may impact securities market transactions of investors having accounts only with that bank

Advises investors to review banking arrangements, add additional bank accounts with other bank
 

NHAI advises users of Paytm Fastag to switch to another bank before Friday