Paytm Payments Bank will commence its operations from May 23, as it has secured the final approval from the Reserve Bank of India, its parent company One97 Communications said.
Paytm Payments Bank will commence its operations from May 23, as it has secured the final approval from the Reserve Bank of India, its parent company One97 Communications said on Wednesday. The company has appointed Renu Satti as the CEO of Paytm Payments Bank. Satti currently is the vice-president of business at Paytm. “As per the directions of the RBI, the company will be transferring its wallet business to the newly incorporated payments bank entity, Paytm Payments Bank, under a payment bank licence awarded to a resident Indian, Vijay Shekhar Sharma,” the company said in a notice.
Under the payments bank licence, Paytm wallet users will be transferred to Paytm Payments Bank unless the user notifies otherwise. The amount can be transferred to his/her bank account after the user provides the name of the account holder, account number and IFSC code. Last year, Paytm had separated its wallet business from the horizontal e-commerce portal. The two businesses are known as Paytm Payments Bank and Paytm E-Commerce Pvt. Ltd.
Paytm Payments Bank was registered in August 2016 as a subsidiary of One97 Communications with Sharma holding a 51% stake in the company. For the first five years, the stake of the promoter in payments banks should be at least 40%, according to the RBI guidelines. The launch of the payments bank launch has been delayed though the company bagged the in-principle nod from the central bank in August 2015. Other companies which bagged the payments bank licence include Reliance Industries, Aditya Birla Nuvo, Fino Pay Tech Ltd, and Vodafone m-Pesa.
According to the RBI’s guidelines, payments banks can accept deposits of up to `1 lakh from each individual customers and issue services such as ATM cards, net banking and non-risk financial products such as mutual fund and insurance. Payments banks, however, are not eligible to offer loans or credit cards. Earlier this month, FE had reported that Japan’s SoftBank Group is in talks with One97 Communications to invest around $1.4 billion in its mobile payments company, Paytm. The fund-raising could raise the company’s valuation to $7 billion.