The RBI 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.
Sharma, who founded digital payments provider Paytm, owns a 51% stake in the bank while the rest is owned by his holding company One 97 Communications, which is backed by China's ecommerce major Alibaba Group. “We now need to open a National Electronic Funds Transfer account for our bank, which takes 2-4 weeks, and then are ready for launch,“ said Sharma, who will make an individual investment of Rs.220 crore out of the total corpus of around Rs.400 crore required to set up the bank.
Sharma said he would take take full-time executive responsibility of the payment bank. The first branch will open in Noida in Uttar Pradesh, where One 97 is based.
Last month, One 97 Communications, hived off its mobile wallet business: Paytm, to the payment bank . It said that wallet accounts would be moved to the bank.
The company had set a deadline of December 21, 2016 for users to communicate if they did not wish their accounts to be transferred to the payment bank. Once the bank is launched, users can transfer money from Paytm wallet to their account in the Paytm Payments Bank account without any charge.
The board of Paytm Payments Bank includes Sharma, Shinjini Kumar, CEO of the bank, and Ashit R Lilani of venture capital firm Saama, which is also an investor in One 97 Communications.
Payments banks are a new model of banks conceptualised by the RBI, which can accept a restricted deposit of up to Rs.1 lakh per customer. But these banks cannot grant loans or issue credit cards.
Payments banks can, however, provide customers with ATM cards, debit cards and offer services such as online and mobile banking.
Paytm was among 11 applicants which had received RBI's in-principle approval to start a payments bank in August 2015.
Since then, several players have opted out including Dilip Shanghvi, promoter of Sun Pharmaceutical Industries; Tech Mahindra; and Cholamandalam Distribution Services.
Airtel M Commerce Services, started its Airtel Payments Bank in November.
Sharma, who founded digital payments provider Paytm, owns a 51% stake in the bank while the rest is owned by his holding company One 97 Communications, which is backed by China's ecommerce major Alibaba Group. “We now need to open a National Electronic Funds Transfer account for our bank, which takes 2-4 weeks, and then are ready for launch,“ said Sharma, who will make an individual investment of Rs.220 crore out of the total corpus of around Rs.400 crore required to set up the bank.
Sharma said he would take take full-time executive responsibility of the payment bank. The first branch will open in Noida in Uttar Pradesh, where One 97 is based.
Last month, One 97 Communications, hived off its mobile wallet business: Paytm, to the payment bank . It said that wallet accounts would be moved to the bank.
The company had set a deadline of December 21, 2016 for users to communicate if they did not wish their accounts to be transferred to the payment bank. Once the bank is launched, users can transfer money from Paytm wallet to their account in the Paytm Payments Bank account without any charge.
The board of Paytm Payments Bank includes Sharma, Shinjini Kumar, CEO of the bank, and Ashit R Lilani of venture capital firm Saama, which is also an investor in One 97 Communications.
Payments banks are a new model of banks conceptualised by the RBI, which can accept a restricted deposit of up to Rs.1 lakh per customer. But these banks cannot grant loans or issue credit cards.
Payments banks can, however, provide customers with ATM cards, debit cards and offer services such as online and mobile banking.
Paytm was among 11 applicants which had received RBI's in-principle approval to start a payments bank in August 2015.
Since then, several players have opted out including Dilip Shanghvi, promoter of Sun Pharmaceutical Industries; Tech Mahindra; and Cholamandalam Distribution Services.
Airtel M Commerce Services, started its Airtel Payments Bank in November.
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