Paytm, reeling from the Reserve Bank of India’s stringent measures, continues to face a market downturn and user panic. Despite the crisis, the company’s management, led by founder and CEO Vijay Shekhar Sharma, has shown solidarity with its employees, a rarity in times when layoffs often follow profit downturns. During a virtual town hall, Sharma expressed uncertainty about the exact cause of the issue but assured that everything would be resolved soon.
The online payment services provider is grappling with a significant crisis following the RBI’s ban on its banking wing, Paytm Payment Bank. The company’s shares plummeted by over 40% in just three days. However, Sharma, along with President and COO Bhavesh Gupta and Paytm Payment Bank CEO Surinder Chawla, conveyed to employees that there would be no layoffs, emphasizing ongoing discussions with the RBI and collaboration efforts with other banks.
Addressing concerns raised by the RBI’s order to ban the services of Paytm Payment Bank, Vijay Shekhar Sharma highlighted ongoing discussions with the regulatory authority, emphasizing the company’s commitment to compliance. He assured employees that Paytm is actively working with other banks to explore collaborative partnerships, seeking avenues for a resolution. This commitment to open dialogue and collaboration aims to navigate the challenges posed by the RBI’s restrictions, showcasing Paytm’s determination to find effective solutions in these turbulent times.
Paytm’s leadership, including Bhavesh Gupta and Surinder Chawla, underlined the importance of employee morale and unity. The company’s emphasis on no layoffs reflects a dedication to its workforce, fostering a supportive environment amidst external challenges. Despite the decline in market capitalization, Paytm’s leadership remains steadfast in its commitment to finding strategic alternatives and upholding the company’s core values, assuring employees of a collective effort to overcome the crisis.
In response to the RBI’s order on January 31, 2024, which banned Paytm Payment Bank’s services due to non-compliance and supervisory concerns, Sharma assured employees that they are part of the Paytm family, emphasizing that there is nothing to worry about. The RBI’s action, taken under Section 35A of the Banking Regulation Act-1949, prohibits Paytm Payment Bank from adding new customers or accepting deposits/top-ups after February 29. Paytm has until March 15 to settle nodal accounts, according to the RBI order.
Contrary to rumors, Paytm’s parent company, One97 Communication Ltd, filed a statement on February 4, 2024, rejecting reports of an ED investigation into money laundering activities involving Paytm founder Vijay Shekhar Sharma. The filing clarified that no such investigation had taken place and highlighted the company’s history of cooperation with authorities during questioning of traders/users on its platform.
Despite the RBI’s actions leading to a decline in Paytm shares by 43% in the last three days, Sharma and his team remain optimistic about resolving the situation. The company’s market capitalization has dropped to Rs 27,850 crore, with shares hitting a lower circuit of 10% on the first trading day of the week. However, there was a marginal rise of about four percent on Tuesday, indicating a potential shift in investor sentiment.
