Paytm has formally launched its payments bank at the hands of the Union Finance Minister Arun Jaitley in Delhi.
With the launch, the payments bank is issuing RuPay debit cards for every account holder and will be launching cash withdrawal points with business correspondents across the country.
The payment bank is eyeing to have 1 lakh ATMs by March next year. Launched in 2010 by Vijay Shekhar Sharma, Paytm claims to have 280 million registered users, 180 million wallet users, and 5 million merchants.
Importantly, Paytm is launching a Zero Balance account, which will never charge for a zero balance account ever. For deposits, Paytm Payment Bank offers 4-7% interest rate on the savings account and up to 7% on a linked sweep out fixed deposit.
Currently, Paytm claims to have 9% of IMPS market share transactions. It’s driving 250,000 IMPS transactions on a daily basis.
Paytm Payments Bank: A quick snapshot
To offer many services like loans and term deposit, Paytm Payments Bank is partnering with full-service banks. Due to RBI regulatory restrictions, the firm cannot offer certain services as of now. It can take savings deposits and remittances but are not permitted to lend.
According to Vijay Shekhar Sharma, the payments bank will offer small and microloans from partner banks in a range of Rs Rs 2,000 to 20,000.
Earlier this month, the digital payments firm Paytm integrated BHIM UPI, the government-owned mobile payments interface, onto its platform as it looks to double its monthly user base over the next two years.
It also migrated 170 million (17 crores) digital wallets to its payment bank and aims to reach 500 million account mark by 2020.
Last year, the Reserve Bank of India had allowed 11 entities, including Paytm for setting up payments bank operations with the objective of deepening financial inclusion in the country.