Paytm, India’s E-wallet giant has just received Reserve Bank Of India’s approval to launch itself as a payment bank. Back in 2014, the year when Paytm was launched, little did we wonder that we would be depositing our money in there some day.
In case you are wondering what is a payments bank, let us clear the air for you.
Payment banks are a new model of banks conceptualised by the Reserve Bank of India (RBI), where these banks can accept a restricted deposit currently limited to INR 1 lakh per customer.
These banks cannot issue loans and credit cards. However, both current accounts and savings accounts can be operated by such banks.
In fact, you can soon expect Paytm to offer services like ATM cards, debit cards, online banking and mobile banking.
Vijay Shekhar Sharma, the founder of Paytm, wrote in a blog post about his elation and the plans to take a full-time executive role in the Paytm payment bank.
The company had been eyeing the approval since 2015, and it is now that they have been granted permission. The first such bank was launched in India by Airtel in November, and they’re running their pilot project in Rajasthan.
“At Paytm Payments Bank, our aim is to build a new business model in the banking industry, focussed on bringing financial services to 100’s of millions of un-served or underserved Indians,” Vijay wrote in his blog.
— Renu Satti (@renusatti) January 3, 2017
They’ve also just launched the facility of UPI as a payments channel to recharge its wallet balance, meaning one can recharge their Paytm wallet with the BHIM app.
It will also merge its wallet and payment bank, and thus, your wallet balance will automatically become your bank balance.
— Paytm Payments Bank (@PaytmBank) January 3, 2017
A person can deposit up to Rs 1 Lakh, the limit of which might increase in the future. Paytm, as a payment bank here, will pay customers interest on the money that is being deposited.
Until future progress, a person can deposit an amount up to 1 lakh rupees. As a payment bank, Paytm too will pay it’s customers an interest on the money that is being deposited.