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

Paytm, which deals with financial services, may soon lay off workers. The company has said that it will cut 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 approximately $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 around $5.5 billion. The company’s shares have also fallen drastically in the last few months. Paytm It was started in 2010 by entrepreneur Vijay Shekhar Sharma. Paytm’s reputation has taken a hit due to the restrictions imposed by RBI. With this, Paytm customers can go to its rival PhonePe. The company said that it is in profit before interest, tax, depreciation and amortization and employee incentives. Along with this, Paytm expressed apprehension that the revenue may decline to Rs 16 billion in the June quarter. The company said that after this its business may improve. It says that to make the company balanced, it will have to reduce employee costs as well as non-core assets.

It competes with Amazon.com, Google and billionaire Mukesh Ambani’s Jio Financial Services. Paytm said that it has lost about 40 lakh monthly transacting users in the fourth quarter. It has given loans worth a little more than Rs 57 billion. In the previous quarter, these loans were worth more than Rs 155.

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 amounts sent through PPBL accounts. The FIU under the Finance Ministry had investigated PPBL after receiving information from law enforcement agencies that some entities were involved in illegal activities including online gambling and sending the proceeds through banks.