Paytm founder Vijay Shekhar Sharma has assured employees that there will be no layoffs despite the ongoing challenges faced by the company after the Reserve Bank of India (RBI) imposed restrictions on Paytm Payment Bank Ltd (PPBL).

Also Read: Here’s Why RBI Bans Paytm Payments Bank

RBI’s restrictions include prohibiting PPBL from providing a range of basic banking services such as accepting deposits, processing FASTag transactions and conducting credit transactions.

“You are part of the Paytm family and there is nothing to worry about. Many banks are helping us,” a report HT Quoting Vijay Shekhar Sharma’s speech at a virtual town hall meeting with PPBL employees.

“We are not entirely sure what exactly went wrong. But we will figure everything out soon. We will contact the Reserve Bank of India and see what steps can be taken,” he said.

Paytm will continue to work as usual

Sharma also said on Friday that the system is functioning and will continue to function as usual even after February 29. The Paytm founder said on social media platform X that the company is committed to serving the country with full compliance.

“For every Paytmer out there, your favorite app is working and will continue to work after February 29,” Sharma said.

RBI has banned PPBL from accepting deposits or recharges from any customer account, prepaid instruments, wallets, FASTags, etc. after February 29, 2024.

OCL holds 49% stake in PPBL but classifies it as an associate of the company rather than a subsidiary.

“I join every member of the Paytm team in saluting you for your tireless support. For every challenge, there is a solution and we are sincerely committed to serving our country with full compliance. India will lead the way in payments innovation and Inclusion in financial services continues to win global accolades, with PaytmKaro being the biggest champion,” said Sharma.

Paytm top executives said during an earnings call on Thursday that they are working with other banks on migration plans for users of PPBL, wallets, FASTag and others.

The company believes the RBI order will have an impact of Rs 300-500 crore on its annual operating profit as its customers will not be able to top up wallets, FASTag, etc.

In addition, the company informed that its offline merchant network products and equipment business (such as Paytm Soundbox, EDC, QR) will not be affected by the instructions of the Reserve Bank of India to its associated banks. The fintech company will also continue to onboard merchants to its platform.

“Paytm’s payment gateway business (online merchants) will continue to provide payment solutions to its existing merchants. Other financial services such as loan distribution, insurance distribution and equity broking also do not have any relationship with Paytm’s associate banks and are not expected to be affected by this impact in one direction,” the company said.

Paytm said the RBI order will also not affect deposits in users’ savings accounts, wallets, FASTag and NCMC (National Common Mobile Card) accounts and they can continue to use their existing balances.

The Reserve Bank of India has ordered PPBL to settle all pipeline transactions and node accounts (relating to all transactions initiated on or before February 29, 2024) by March 15, 2024, after which no further transactions will be allowed.

Sharma said during the call that the RBI order was a “huge speed bump” and said he could not understand the trigger for the move or know the exact nuances that triggered it.

“I can say on behalf of Paytm that this is more of a huge speed bump, but we believe that through partnerships with other banks and the capabilities that we have developed, we will be able to do so in the coming days or as the case may be,” he said .