Paytm to start its payments bank operations from Monday
The Noida-based company will transfer its wallet business to the new entity.
Digital wallet firm Paytm will start its payments bank service from May 23, reported PTI. “Paytm Payments Bank Ltd [PPBL] has received the final licence from the Reserve Bank of India and would commence its operations on May 23, 2017,” the company said in a public notice. Paytm’s Vice President Renu Satti will be the chief executive officer of the payments bank, reported The Economic Times.
The Noida-based company will transfer its wallet business to the new entity. However, if consumers do not want to go for it, they will have to inform Paytm prior to May 23. The consumers will have to share details of their bank accounts and Paytm firm will then transfer their wallet balance to those accounts. For consumers whose Paytm wallet has been inactive for the past six months, the balance will get transferred to PPBL only after they give consent. Currently, Paytm has more than 218 million users.
The payments banks will accept deposits up to Rs 1 lakh from individuals as well as small businesses. The bank operations have been delayed for months. Paytm was supposed to start it around Diwali last year. While founder of Patym’s parent company One97 Communications Vijay Shekhar Sharma will hold the majority share in PPBL, the rest will belong to Alibaba-backed One97 Communications. However, the China-based firm will not have a direct shareholding in the payments bank, according to PTI.
This is the third payments bank to launch after Bharti Airtel and India Post. Payments banks – a new model of banks conceptualised by the RBI – cannot issue loans and credit cards, but many are considering cross-selling banking products through partnerships. They can offer services like ATM and debit cards as well as online and mobile banking.