Paytm Payments Bank focuses on transaction volumes

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New Delhi | Published: June 22, 2019 12:39:58 AM

Paytm Payments Bank, which turned profitable in the second year of its operation, plans to focus on corporate salary accounts and direct money transfers in the current financial year to augment transaction volumes.

The bank currently has 200,000 business correspondents (BCs) across 550 districts in the country.

Paytm Payments Bank, which turned profitable in the second year of its operation, plans to focus on corporate salary accounts and direct money transfers in the current financial year to augment transaction volumes.

“Irrespective of whether customers have bank account with us or not, they will be able to send money to any bank account holder through our business correspondents (BCs),” said Satish Kumar Gupta, MD and CEO, Paytm Payments Bank. The bank will charge a fee for the transaction from the sender. The bank currently has 200,000 BCs across 550 districts in the country. Gupta said once all BCs are e-KYC enabled, it will drive up volumes and add to the profitability of the bank.

As per RBI guidelines, payments banks are not allowed to engage in lending activities and at least 75% of deposits they receive is to be invested in government securities. The rest goes to demand and time deposits with other scheduled commercial banks, leaving little scope for generating revenues. The bank makes money by charging transaction fee from customers.

Gupta said the bank has already got required licences from the RBI to sell third-party insurance and mutual fund products, and the service will be started soon. The bank plans to launch the service by the end of June. Since a payments bank savings account cannot have deposit of more than Rs 1 lakh, Paytm Payments has tied up with other banks wherein the excess money is swept into a fixed deposit with the partner bank.

The two accounts are connected and money can be redeemed from the fixed deposit in real time, without any charge.

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