Paytm launched its Payments Bank on May 23, 2017, and thereby became third entity (after Airtel Payments Bank and India Post Payments Bank) to commence operation as Payments Bank. However, services of Paytm Payments Bank are currently available only via invitation.
More Details about Paytm Payments Bank:
- The first physical branch of Paytm Payments Bank is in Noida.
- Over the next two years, Rs. 400 crore will be invested to build the banking network. One97 Communications (Paytm Payments Bank’s parent company) has already invested Rs. 220 crore.
- Paytm Payments Bank has laid out plans to open 31 brick-and- mortar branches and add 3000 customers within first year of its operations.
- Medium term plan is to add 500 million customers by year 2020.
Paytm Payments Bank – Offerings:
- Paytm Payments Bank is offering 4% per annum on savings accounts interest, which is lesser than its competitor Airtel Payments Bank (7.25% per annum) and India Post Payments Bank (5.5% interest per annum).
- Cash withdrawal charges through ATMs are similar to those of any other major bank in India.
- The Paytm blog post which announced the launch of payments bank has mentioned about zero charges on online transactions, no minimum balance requirement and free virtual debit card.
- It is to be noted that, Paytm wallet service will now be owned by Paytm Payments Bank. This transfer of ownership from One97 Communication Ltd. to Paytm Payments Bank Ltd. will not affect the users.
About Payments Bank:
- In Indian context, Payments Bank is a new category of bank which can undertake restricted banking activities.
- Concept of Payments Bank was recommended by Committee on Comprehensive Financial Services for Small Businesses and Low Income Households, set up by Reserve Bank of India(RBI). This committee was headed by Nachiket Mor.
- RBI’s objective behind setting up Payments Bank was to promote financial inclusion.
- On 19th August 2015, Reserve Bank of India gave "in-principle" licences to eleven entities to launch Payments bank. Out of these, 3 entities have dropped out citing low business potential.
- Except Vodafone M-Pesa Ltd, other 7 entities have received the final licence from RBI.
- Payments Bank is currently permitted to accept demand deposits up to Rs. 100000/- per customer.