Mobile commerce and payments company Paytm on Tuesday said the Reserve Bank of India has given it the final permission to open a payments bank.
The central bank has approved the launch of the Paytm Payment Bank, according to its founder Vijay Shekhar Sharma, who expects the bank to begin operations next month.
“Today, Reserve Bank of India gave permission to formally launch Paytm Payments Bank”. Paytm was one of the 11 companies that received the RBI’s in-principle approval for launching a payments bank.Paytm had launched its mobile wallet on January 3, 2014, and has since become the category leader.
Last August, Paytm parent company One97 Communications raised $60 million from Taiwanese chip manufacturer MediaTek, part way to a $300 million target to fund the firm’s move into the banking sector. Unlike a regular bank, however, a payment bank can’t loan money to people or issue credit cards. Vijay Shekhar Sharma, the founder of Paytm, wrote in a blog post that he intends to take a full time executive role in the Paytm payments bank. Airtel too begun with a payments bank a year ago and is now running a pilot phase in the state of Rajasthan.
“We are going live with our payments bank by February in UP”. Paytm Payments Bank is held 51% by Sharma and 49% by One97 Communications Pvt Ltd. Aditya Birla Idea Payments Bank is expected to launch services in the first half of 2017.
Alibaba Group and its affiliate Ant Financial pumped in $680 million into Paytm’s parent One97 Communications previous year, taking its total shareholding to over 40 per cent in the country’s largest mobile wallet operator, Paytm. Payments banks can be integrated with your savings bank accounts via IMPS and NEFT transfers. Meanwhile, the payments bank will be another feather in Paytm’s hat. A total of 21 entities received in-principle nod past year, including 11 for payments banks. It will be able to allow account holders to transact through NEFTs, RTGS and UPI too. We will drive and scale up payments business even today, while others have to build payments business,”Sharma said in 2015″.
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