Digital payment behemoth Paytm has partnered with ICICI Bank to launch an interest-free short-term loan product – Paytm-ICICI Bank Postpaid. It will enable Paytm customers to access instant loans in the range of Rs 3,000 to Rs 10,000 for bill payments, flight and movie tickets, recharge among several others.
The loan amount can also be extended up to Rs 20,000 based on customer’s repayment history.
Initially, Paytm-ICICI Bank Postpaid will have access only to select customers of the bank using the Paytm app. Soon, it will be available to non-ICICI Bank customers.
Once the credit limit is set up for a customer, a consolidated bill is generated on the first day of the next month. Customers will have a period of 45 days to repay the loan amount.
“We have leveraged upon Big Data to develop a new algorithm that instantly assesses the creditworthiness of customers using a combination of financial and digital parameters to sanction the credit line instantly,” said Anup Bagchi, Executive Director, ICICI Bank in a press statement.
ICICI does real-time credit assessment of customers by combining financial and digital behaviour of the customer including credit bureau check, purchase patterns, the frequency of purchase to know the creditworthiness of a customer.
Paytm-ICICI Bank Postpaid will charge nothing if customers pay back by due date while on late payment Rs 50 will be applied as a late payment charge. On late payment, customers need to pay an interest for the period between payment due date and date of payment at 3% per month.
“Paytm Postpaid will play a major role in helping them pay for their daily expenses on time. This will democratise access to credit including those with less disposable income,” said Paytm founder and CEO Vijay Shekhar Sharma.
The Softbank-funded company is also planning to offer loan service by partnering with full-service banks. In April this year Paytm had partnered with gold refiner MMTC-PAMP to launch ‘Digital Gold’ that will allow customers to buy and sell gold through the electronic platform.
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