Paytm's CEO says there would be no layoffs, working with RBI: Report

Paytm crisis: Paytm founder and CEO Vijay Shekhar Sharma has assured employees that there would be no layoffs in the company and that they are engaging with the Reserve Bank of India (RBI) and working with other banks for partnership, reported Moneycontrol.

According to the report, Sharma said in a virtual town hall with employees of Paytm Payments Bank (PPBL) that many banks are helping them. "You are a part of the Paytm family, and there is nothing to worry about," he said on Saturday.

Apart from Sharma, Paytm president and COO Bhavesh Gupta and PPBL CEO Surinder Chawla were also present at the town hall.

Sharma further stated that they are not completely sure of things "like what exactly went wrong".

Further assuring the employees that they would figure everything out soon, Sharma said they would reach out to RBI to see what could be done in the virtual town hall attended by 800-900 employees.

On January 31, the RBI directed PPBL to stop onboarding of new customers with immediate effect due to "persistent non-compliance and continued material supervisory concerns in the bank" following a compliance validation report by external auditors.

RBI asked PPBL to stop further deposits, credit transactions, and top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc, after February 29. However, users can utilise their balances or withdraw money from their accounts without any restrictions.

The nodal accounts of Paytm parent One97 Communications and Paytm Payments Services must be terminated as soon as possible, and all pipeline transactions and nodal accounts must be completed by March 15, RBI said.

In a filing on February 4, Paytm parent One97 Communications, responding to certain reports, clarified that there has been no investigation by the Enforcement Directorate (ED) on the founder and CEO, and the company for money laundering activities.

"In the past, certain merchants/users on our platforms have been subject to enquiries and on those occasions, we have always cooperated with the authorities. During any such investigations by the authorities on any set of merchants/users in the past, we have cooperated with them on these investigations. This has been previously disclosed to the stock exchanges. We would like to set the record straight and deny any involvement in anti-money laundering activities," the company said.

Meanwhile, stock exchanges have cut Paytm's price band for the stock to 10 per cent from 20 per cent, following the 36 per cent rout on the counter in the last two days.