May 23, 2017
After a few months of delay, Paytm payments bank is going to commence its operations from today. Paytm, the Indian payment and ecommerce company, finally received approval from the Reserve Bank of India to make its payments bank operational. Paytm announced in a public notice that the new banking entity will be called Paytm Payments Bank Ltd (PPBL).
Paytm Payments Bank will open around 30 branches and 3000 service points this year. It’s currently offering Rs.250 as cashback for deposits of Rs.25,000. The bank can accept deposits up to Rs.1 lakh. Paytm will soon roll out a different app for the payments bank and it also plans to offer Rupay debit cards to the users. These debit cards can be utilized for cash withdrawals at ATMs.
RBI awarded the payments bank licence in the name of Vijay Shekhar Sharma, the founder of Paytm. Paytm will now initialize the process of moving its wallet to PPBL. At present more than 218 million people use this mobile wallet. In case the users do not want their Paytm wallet to be transferred to the payments bank, they will have to notify the company. Paytm will then transfer the wallet balance to their respective bank accounts. Individual users and small businesses can deposit up to Rs.1 lakh per payment bank account, as per RBI guidelines.
Renu Satti, the current Vice President of Paytm, will be the new CEO of Paytm Payments Bank Ltd (PPBL). Paytm intends to raise around $1.4 billion from Softbank Corp., based in Japan and a large portion of these funds will be utilised to boost the operations of PPBL, which received Rs.218 crores as fresh funds in February 2017.
Paytm was one of the 11 entities that received in-principle nod by the Reserve Bank of India in 2016 to operate payment banks. Currently, India Post and Airtel are the only two companies that operate payments bank in the country. This year, another payments bank backed by the Aditya Birla Group is also expected to commence its operations.